The National Association of Pension Funds (NAPF) has commented today (Sunday) on the Chancellor’s plan to extend its pension freedoms to around 5 million people, by allowing current pensioners to sell their annuities on the open market.
Joanne Segars, Chief Executive, National Association of Pension Funds, said:
"It's clear to see how this fits with this Government's agenda for pensions but what is less clear is how savers will be protected. A full consultation will be essential to ensure a fair and balanced market is created.
"The consultation would need to look at how the buy-back price of an annuity would be calculated so people selling their annuity could be assured of good value; and also consider a prescribed process for introducing buyers and sellers to avoid excess costs, which would inevitably be carried by the consumer. And clearly, if this comes into effect the Pension Wise service would also have to be equipped to provide thorough guidance on this topic.
"This suggested reform should not distract us from or undermine the Freedom & Choice reforms which are due to begin imminently. The Government will need to make sure this doesn't divert focus or resource from Pension Wise, damage the broader annuity market or slow down the development of a much-needed market in retirement solutions."
For more detail on the Chancellor's announcement read the press release on the Government website.
Notes to editors:
The NAPF is the voice of workplace pensions in the UK. We speak for over 1,300 pension schemes that provide pensions for over 17 million people and have more than £900 billion of assets. We also have 400 members from businesses supporting the pensions sector.
We aim to help everyone get more out of their retirement savings. To do this we spread best practice among our members, challenge regulation where it adds more cost than benefit and promote policies that add value for savers.
Lucy Grubb, Head of Media and PR, NAPF, 020 7601 1726 or 07713 073023, [email protected]
Eleanor Bennett, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]