BUDGET 2015 - PwC insurance leader comments on annuity rules extended for existing pensioners - the obvious next step

Published at 08:17 AM on 17 March 2015

Jonathan Howe, UK Insurance Leader at PwC, commented: 

“From a consumer perspective, the proposals are exciting and, if buy-back is used wisely, it will be an important tool to ensure pensioners end up with the right combination of pension assets post-retirement. This announcement was the obvious next step in the pensions freedom agenda. 

“Dealing with buyer's regret should be welcomed. However, it is clear that there remains a place for annuities in securing at least a minimum standard of living in retirement, and the challenge for advisors, insurers and government alike will be to get this message across alongside the new proposals. 

“Of course one key question is whether the pricing will be attractive to customers – once they have seen the prices they are offered will they want to sell?  Although cashing-in may be attractive to many in principle it remains to be seen if this market can deliver the value pensioners are looking for. 

“The Budget speech on Wednesday should shed further light on how this new group of individuals will be informed about their choices. Following the reforms announced last year there are already concerns about the advice gap, the untested PensionWise service and the FCA’s new second line of defence requirements for pension providers. This new announcement will ramp up demand for the already stretched guidance/ advice services and underlines the question – will individuals have enough information to make good decisions?

“With the UK pension industry moving in to uncharted territory, we expect a number of insurers will be keen to explore the annuity buy-out market and, indeed, a number have already expressed an interest. However, it will take time for companies to develop their business model and ability to offer competitive pricing before a thriving second hand annuity market develops.” 

Ends                                                                                    

Notes to editors 

Jonathan Howe is available for interviews. Please contact Ellie Raven on [email protected] or +44 (0) 207 804 3663 

About PwC
PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
 
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.
 
©2014 PricewaterhouseCoopers. All rights reserved.

Ellie Raven, Media Relations, PwC

Tel: +44 (0) 207 804 3663

Email: [email protected]


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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