FCA sets out Pension Wise standards for secondary annuities

Pension Wise jenga

The FCA has set out the standards Pension Wise staff should be expected to meet when giving guidance to people considering selling their annuity.

The consultation paper, released today, follows the Government’s move to extend access to Pension Wise to those thinking about selling their annuity when the secondary annuity market is introduced in April 2017.

The regulator has set out proposals for the kind of knowledge it expects Pension Wise workers to have on the secondary annuity market.

This includes: the tax implications of selling an annuity, the details of when advice is required, and the circumstances when a consumer might need further specialist help.

The FCA is also proposing to set out in the standards what a guidance session on selling an annuity should cover.

The paper also proposes changes to the standards reflecting how Pension Wise is now being used by consumers and also how the service has changed since it was set up.

Those proposals are:

  • to clarify that a Pension Wise session can cover more than one appointment
  • that only relevant information from the consumer should be included in the record of the guidance session, and
  • to remove references to the Treasury given that Pension Wise is now part of the Department for Work and Pensions.

These changes would apply to all Pension Wise workers, not just those giving guidance on selling annuities.

The consultation closes on 4 October.

The move comes as Hargreaves Lansdown has decided it will not be operating a broking service for secondary annuities, given the risks the market poses.

It is considering whether or not to offer an advisory service on secondary annuities.

Money Marketing reported Hargreaves’ concerns about the cash for annuities market earlier this year.