The Treasury is considering launching a consultation on plans to allow savers to trade-in their annuity in this year’s Budget, Money Marketing understands.
Government officials have held meetings with senior figures at pension providers in recent weeks to discuss changing the law to allow the creation of a secondary annuity market.
Industry insiders say the Treasury is considering whether plans to allow pensioners to sell on their annuities should be included in the March Budget, the last major event before the general election in May.
In December, pensions minister Steve Webb floated the idea that people who had already bought an annuity, and were set to miss out on the new pension freedoms, should be able to sell the contracts on.
He said: “No one would be obliged to do so, but for those who would prefer upfront capital to regular income, I can see no reason why this should not be an option.”
Webb’s parliamentary adviser told Money Marketing the pensions minister wanted to advance the plans “in this Parliament”. A Treasury spokeswoman says it was Government policy not to comment on the contents of the Budget.
Providers have raised concerns over the complexities of creating a new market at a time of immense change for the industry, although the policy is likely to be viewed as a potential vote winner by politicians.
Few providers have publicly come out in support of the idea, although enhanced annuity provider Just Retirement is in favour of reform.
Director Stephen Lowe says: “We are supportive of the idea to explore how a secondary market could be created to help those people who want to reconfigure their existing retirement benefits. Clearly the Government and regulators would need to make changes to ensure the necessary conditions are established to enable a market to be lawfully created.”