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FCA lessens annuity review demands on insurers after Budget reforms

The FCA has reduced its demands for data on insurers as part of its review of the annuity market in light of the fundamental pensions overhaul announced in the Budget.

In his Budget speech last month Chancellor George Osborne shocked the industry when he revealed plans to allow savers to take their entire pension pot as cash when they reach age 55. The reform will be introduced in April next year.

The FCA is currently carrying out a 12-month review of competition in the annuities market after publishing the findings of its annuities thematic review in February.

Giving evidence to the Treasury Select Committee today, FCA director of policy risk and research Chris Woolard was pressed on whether the regulator should fundamentally change or delay its review in light of the reforms announced in the Budget, many of which are subject to consultation. 

Woolard said the regulator has altered the scope of the review and reduced the demands for information on insurers.

He said: “We wrote to a number of firms on Budget day and subsequently on 26 March. We have modified a number of the questions we had asked as part of our review, in particular where they have been effectively overtaken by the Budget.

“We are focusing more of the study towards the future, and we have taken a number of information requests off the table.”

Last month Association of British Insurers director of policy Huw Evans said the FCA will need to rethink the scope, timing and purpose of its annuity market study following the Budget reforms.

Legal & General has warned Osborne’s reforms risk being rendered ineffective unless the FCA relaxes its regulatory approach.

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  1. What a waste of resources, should be used to it I suppose.
    The reforms of course may or may not be enacted by next year and probably not in the form announced in the budget.
    There will be changes because the current proposals are probably unworkable.

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