Life insurers lobby financial regulators over pension plans
31st March, 2014
Life insurance executives are urging governing bodies to intervene after George Osborne’s decision to shake-up pensions.
Company chiefs have approached the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) in the last few days over the chancellor’s decision to give pensioners more flexibility regarding their pension pots, and the effect this will have on the multi-billion pound annuities market. The planned pension changes are due to take effect by April next year.
The chancellor's so-called 2014 'Budget for savers' saw £4.4 billion wiped off the value of the UK's biggest life insurers. The hit was also felt by companies that compare life insurance quotes and offer to find the best deals for investors.
Senior industry executives, who did not want to be named, said some colleagues were angry that they had backed the government's infrastructure proposals but had not been consulted before the Budget announcements. Plans for £25 billion to be injected into British infrastructure over the next five years by leaders in the insurance sector may now be in jeopardy.
The FCA has been called on by chief executives to put an end to an annuity review, which began last month because of concerns that the market is 'dysfunctional' with pensioners suffering inertia when it comes to their product choices.
The FCA is set to publish its results in June or July, around the same time that the Treasury will report its findings after a 12-week review of the government’s annuities plans.