Annuities

HM Treasury written question – answered on 4th December 2015.

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Photo of Gregory Campbell Gregory Campbell Shadow DUP Spokesperson (International Development), Shadow DUP Spokesperson (Cabinet Office)

To ask Mr Chancellor of the Exchequer, what discussions he has had with the Financial Conduct Authority on the conclusion of its thematic review of the annuities market as to whether consumers are being treated fairly in the current financial climate.

Photo of Damian Hinds Damian Hinds The Exchequer Secretary

The Financial Conduct Authority (FCA) places a duty on the firms that they regulate to treat their customers fairly, and the FCA have wide-ranging powers of enforcement in pursuit of this objective.

The FCA’s Retirement Income Market Study, which followed on from the work of the Thematic Review of Annuities and was published in March 2015, recommended greater use of annuity comparisons to encourage greater shopping around by consumers. The FCA are currently conducting behavioural tests on options for presenting these comparisons in the most effective way, and expect to report on these findings and any proposed rule changes in 2016. In addition, the FCA’s Retirement Outcomes Review, which will be published early next year, will assess issues from the Thematic Review - including the issue of eligible consumers not purchasing enhanced annuity products.

The FCA also plan to consider consumers’ wider information needs in light of market developments following the pension freedoms.

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