The Government is preparing to allow private sector companies to set up brokerages to serve the secondary annuity market.
Though the Treasury delayed the start date of the reforms to April 2017 – a year later than originally proposed – it is pushing ahead with plans that will allow an estimated five million people to sell on their annuities.
As part of the consultation process the Government explored how individual annuities should be sold but is due to announce it will allow multiple bureaux to participate, rather than single portal, Money Marketing understands.
Aviva head of financial research John Lawson says: “If you want quotes on an annuity those firms are already out there and essentially this is the same thing in reverse.
“Existing infrastructure can form the basis of a bureau, the machinery is already there – that seems eminently sensible.”
It is also expected the Treasury will reverse its initial proposal to block ceding providers from buying back their own annuities.
Originally, the Government said consumers might believe they could only sell to their provider.
But insurers warned consumers were likely to get worse prices if they were excluded from the process.
Money Marketing previously revealed plans to exclude people on means-tested benefits from the reforms. It is unclear whether policymakers plan to stick with this idea.
Retirement Advantage pensions technical director Andrew Tully says: “Excluding people on means-tested benefits would be very difficult to enforce, I don’t think what has been suggested is particularly viable.”
The Government estimates around 650,000 people would be barred from selling their annuities if the exemption was maintained.
Clarke Robinson & Co managing director Steven Robinson says: “There are a lot of aspects of this that haven’t been realised yet. Firstly, there will need to be a medical assessment even to quote properly. Otherwise the person buying it won’t get a good price.
“I think you’ll also find there is much more demand than advisers willing to work in the market. FOS are starting to award clients where they went into drawdown instead of buying an annuity and this is one step worse.
“It could be the PI insurers dictating which advisers remain in the market.”