Just over a week into the new year, Annuities seem to making the headlines almost daily, and now one MP has warned the popular product could become the next mis-selling scandal.
Speaking during a parliamentary debate yesterday Conservative MP, Richard Graham , said many pensioners did not fully understand the Annuities they bought, or the fees they would have to pay.
Graham said: “Since this is potentially the second biggest financial purchase of our lives, I believe the state of things is worrying.”
Graham continued: “It is therefore not surprising that the Financial Conduct Authority Consumer Panel has recommended urgent regulatory and government-led reform in order to protect and benefit millions of our constituents.”
“The annuities market is no longer working for large numbers of people in this country. It needs to be reformed and, if it is to be useful, then that reform should be welcomed by everybody in the industry because otherwise annuities will not have a new role to play in financial planning in the future.”
“The opaqueness of this market stands in stark contrast to the increasing amount of light being shone on the pensions industry as a whole and therefore is more of anomaly.”
The intervention from Graham, who recently chaired a seminar on Annuities, comes a few days after Pensions Minister Steve Webb caused controversy by suggesting Annuities should be transferable between insurers and a few weeks after the Financial Services Consumer Panel issued a damming report into the non-advised Annuity market.