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Government looks at annuity trees and transfers

The Government is considering introducing decision trees for annuity purchase and allowing policyholders to transfer their annuity between providers after income has been drawn.

The revelation on trees for annuities is likely to concern IFAs and will fuel fears of annuity misbuying.

The proposals for decision trees and transferability are just part of a package of reforms currently being discussed at meetings between industry experts and the Prime Minister&#39s policymakers, the Number 10 Policy Unit.

The news comes as long-term gilt yields fell to their lowest-ever levels last week when yields on 15-year long-dated gilts fell to 4.43 per cent, prompting leading IFAs to recommend clients planning to purchase an annuity to buy now before yields fall further.

Britannic Retirement Sol-utions corporate development director Bob Bullivant says: “From the Government&#39s point of view, the market has been very good at servicing the 20 per cent of the market which has 80 per cent of the wealth. For the other 80 per cent, decision trees might be the answer.”

Annuity Bureau director Ronnie Lymburn says: “Government officials were asking about decision trees in the overall context of annuity purchase but what decision tree will explain what annuity is being bought and what individuals&#39 protected rights are?”

Torquil Clark pensions development manager Tom McPhail says: “Yields have being going through the floor and there is more pain to come. Clients would do best to buy now.”

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