Annuity proposals "stifle" rather than reform

Proposals to reform the annuities market will stifle rather than improve income options for pensioners, says the Investment and Life Assurance Group as defining what an annuity product is would severely limit the field of products available.

Responding to the Treasury's Modernising Annuities paper, ILAG Pensions Committee Chairman, Mike Crick, says several companies have put down ideas to develop new forms of annuity, yet defining what an annuity is or should be will prevent their production.

"We believe that as long as an annuity complies with the Government's high level principles then that is all that is needed, particularly at the present time," says Crick.

"A number of insurers have put down markers, but these have yet to be developed into a range of products aimed at meeting consumer needs. If there must be regulation, it should allow a range of solutions between traditional annuities and pension withdrawals.

"We are concerned that over-regulation will stifle innovation, which still has a long way to go," he adds.

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