Secondary annuity resale website directors have admitted they are "disappointed" with the government's decision to scrap plans for the resale of annuities and their website will fold.
Legal & General backed website AuctionMyAnnuity launched earlier this year in preparation for the launch of a second hand annuity market in April 2017.
But in a statement issued by the government yesterday (18 October), Simon Kirby, economic secretary to HM Treasury, said the government had pulled its plans to launch a secondary annuity market in April 2017 because the "consumer protections required could undermine the market's development".
As a result of the government's u-turn - just six months before the secondary annuity market was supposed to launch - AuctionMyAnnuity, which is 94.48 per cent owned by Legal & General, will now fold.
The website, which is a trading style of Investment Discounts On Line, launched as a holding page in July.
The aim of the website was to introduce consumers and advisers and allow them to register their interest in selling an annuity.
At the time of the launch of the holding page, Mike Preston, director at AuctionMyAnnuity, said the website would be a source of information and help for consumers and advisers.
Today (19 October), however, a spokesperson for AuctionMyAnnuity said: “AuctionMyAnnuity is obviously disappointed with the announcement not to proceed with the secondary annuity market.
"AuctionMyAnnuity’s role in this market was to facilitate the sale of annuities for those consumer’s wishing to use their freedoms.
"What we planned to deliver in April 2017 we believe would have been a very efficient and transparent service for customers.
"Although disappointed with the Treasury’s announcement, AuctionMyAnnuity has always believed the interests of the consumer come first, and therefore if, as the Treasury stated, it believes the market may produce poor outcomes for the consumer we understand the decision.”
A spokesperson for Legal & General said: “AuctionMyAnnuity is obviously disappointed with the announcement not to proceed with the secondary annuity market.
"AuctionMyAnnuity’s role in this market was to facilitate the sale of annuities for those consumer’s wishing to use their freedoms.
"What we planned to deliver in April 2017 we believe would have been a very efficient and transparent service for customers.”
In recent years, post the shock pension freedoms announcement that saw insurers' share prices tumble, Legal & General has been re-shaping.
In May, Legal & General bought a £3bn annuity portfolio from Aegon.
This summer Aegon also purchased Cofunds from Legal & General for £140m.
ruth.gillbe@ft.com
