Those getting divorced or remarried may think it’s a good idea and there may even be some who want to switch to a more flexible pension income product instead.
But Neil Lovatt, director at Scottish Friendly, is highly critical: “The move is like taking an already burning building and fuelling the flames with petrol,” he said.
He warned that people could cash in their annuity and then fall back on state help, meaning taxpayers would pay twice over for such people’s retirement income.
Meanwhile Nick Salter, President of the Institute and Faculty of Actuaries, said: “Allowing existing pensioners to surrender their annuities will not be straightforward for pensioners, insurers or regulators.
“It raises prudential regulatory issues as well as wider business conduct concerns on the secondary annuity sales process and degree of competition.”
