The UK government has scrapped plans to set up a secondary market in annuities saying “it has become clear that creating the conditions to allow a competitive market to emerge could not be balanced with sufficient consumer protections”.
Hargreaves Lansdown will not offer a service for investors to sell their annuities when the UK government scheme launches next year, citing too many risks for investors.
The introduction of a secondary annuity market in the UK should be delayed due to a lack of interest from advisers as well as the post-Brexit fallout, the Association of Professional Financial Advisers (Apfa) has told the UK’s Financial Conduct Authority (FCA).
The UK government has set out the rules and regulation for its planned secondary annuities market which will allow holders to sell their scheme back to a provider or onsell the income stream to an FCA-authorised buyer.
The UK financial services industry has cautiously welcomed the government’s plans to extend its pension freedoms and create a new secondary annuities market by giving more than five million people the ability to sell their annuity from 6 April 2017.
The government’s decision to delay the start of a new secondary market in annuities has been met with widespread relief by the pensions industry which is still grappling with how to implement the proposal.
