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Door is opened to annuities, then slammed shut

The door has been opened by the Treasury to extending the Sandler suite of simple products by up to six products, although it has at the same time ruled out half of them as being unsuitable.

It is forming a panel of providers, consumer groups, trade bodies, regulators and Government officials which will meet to sort out the final details of the products.

Last week&#39s consultation paper into the Sandler products proposed the inclusion of a guaranteed, cash-based, term insurance, annuity products, a generic financial healthcheck and the child trust fund.

It has dropped the inclusion of term cover and annuities, saying neither product is appropriate for the suite.A benchmark price would be useful for term insurance, it said, but the sales regime is already lighter-touch and the products are straightforward.

The open market issues surrounding annuities have been sorted for the lower end of the sector by the Omo requirement, says the Treasury, and the importance of individual circumstances make a standardised product inappropriate. It has also proposed dropping the Catmarked mini cash Isa brand.

Annuity Bureau director Ronnie Lymburn says: “To raise the inclusion of annuities and then simultaneously to kick it into touch does not seem to make a lot of sense. I think some sort of standardised product at the lower end of the market would fit the bill and should not be discounted.”

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