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Insurers fearing collapse of annuity market trap pension savers
| Published: | 26 Mar at 6 PM |
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A number of the UK’s largest insurers are refusing to give pension savers extra time to withdraw from rip-off annuity deals or even to get meaningful professional advice.
Whilst a few firms are playing fair by doubling the 30-day window during which annuities can be cancelled, others are giving just a few days and many are sticking to the 30-day rule. Savers who signed up for annuities late last month now have only a few days to make an informed decision as to what’s right for their circumstances.
Insurance firms, motivated by greed and the fear that the cash cow annuities market will shrink by up to 90 per cent, are saying they were caught out by the Budget announcement. Savers who are unable to withdraw in time are expected to be left with payouts of up to 60 per cent less than they should be receiving.
LV and MGM Advantage are allowing a 60 day window, and Partnership savers will have till 11 April to reverse their decisions, after which the 30 day window takes over. Standard Life annuities taken from 13 February can be cancelled, but Prudential customers only have until 28 March, nine days from the Budget speech, and Legal and General are not moving at all.
Aviva’s customers have been given a few more days to make up their minds, after which anyone who has not reversed his or her decision must hand over their savings for a poor return. It’s good news for savers with pension pots of less than 30,000 total and £10,000 per individual pension pot, as they can cash in the entire amount from tomorrow.
Advisors are urging those needing to make an immediate decision to cancel first and research better deals at a later date. Pensions campaigners and consumer watchdogs are unhappy that, given the present circumstances, an industry standard hasn’t been applied to cancellation periods.
Whilst a few firms are playing fair by doubling the 30-day window during which annuities can be cancelled, others are giving just a few days and many are sticking to the 30-day rule. Savers who signed up for annuities late last month now have only a few days to make an informed decision as to what’s right for their circumstances.
Insurance firms, motivated by greed and the fear that the cash cow annuities market will shrink by up to 90 per cent, are saying they were caught out by the Budget announcement. Savers who are unable to withdraw in time are expected to be left with payouts of up to 60 per cent less than they should be receiving.
LV and MGM Advantage are allowing a 60 day window, and Partnership savers will have till 11 April to reverse their decisions, after which the 30 day window takes over. Standard Life annuities taken from 13 February can be cancelled, but Prudential customers only have until 28 March, nine days from the Budget speech, and Legal and General are not moving at all.
Aviva’s customers have been given a few more days to make up their minds, after which anyone who has not reversed his or her decision must hand over their savings for a poor return. It’s good news for savers with pension pots of less than 30,000 total and £10,000 per individual pension pot, as they can cash in the entire amount from tomorrow.
Advisors are urging those needing to make an immediate decision to cancel first and research better deals at a later date. Pensions campaigners and consumer watchdogs are unhappy that, given the present circumstances, an industry standard hasn’t been applied to cancellation periods.
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