Advisers’ reluctance to help pensioners sell their annuities risks undermining the Government’s plans to create a second-hand market in 2016.
A Money Marketing online poll of 365 advisers reveals 80 per cent would not want to be involved with advising on the merits of selling on an annuity in exchange for cash or moving into drawdown.
Just 20 per cent of respondents said they were interested in advising in the area.
Following the Budget, the Government launched a consultation on the plan, which it said would allow around five million people access to the new freedoms, and suggested it may extend the mandatory advice step recently imposed on transfers out of defined benefit schemes.
In the document it said there was a “strong case” for advice and hinted the £30,000 limit used for transfers could be adopted as a minimum level for execution-only.
Advisers say the FCA’s recent tightening of requirements on pension transfers could lead to a dearth of suitably qualified and willing advisers, leading to thousands of DB members being left frustrated as their access to more flexible defined contribution pensions is blocked.
With advisers also appearing relucant to facilitate sales, Chancellor George Osborne’s cash for annuities plan appears in danger of coming unstuck. Experts have already warned there could be a lack of demand from potential buyers of second hand annuities, such as insurers and pension funds.