The Government is to publish a consultation on annuity reform early next year with the aim of increasing competition in the market place.
The move, outlined in Chancellor Gordon Brown pre-budget statement this week follows Money Marketing reports that the Number 10 policy unit has invited proposals for reform and investigated the feasibility of transferring of annuities and decision trees for the products.
The pre-budget document states: “The annuities market has continued to develop the product range available, giving pensioners more choice. The Government plans to publish a consultation document on how better to promote competition in this market and thereby improve the benefits to customers.”
Many campaigners for reform are hoping the terms of reference will be broader than the pre-budget statement suggests, dealing with wholesale retirement income reform and not just market issues.
Retirement Income Reform Campaign, which called on the Government to announce a consultation in a meeting with Treasury economic secretary Ruth Kelly earlier this month, director Dr Oonagh McDonald says: “We are very pleased with the consultation. We hope it will deal with the fundamental issue of retirement income and that the Government will want to respond to growing public concern.”
Intelligent Pensions managing director Steve Patterson says: “The Government should look at increasing transferability among other issues, it would certainly sort out some of the life offices which offer minimal access to the open market option.”