View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Politics
  2. The Staggers
18 October 2016

Philip Hammond scraps another George Osborne plan

A secondary annuity market is toast. 

By Julia Rampen

If the new Tory government hadn’t delivered enough two-fingered salutes to George Osborne, the Chancellor Philip Hammond has just gone and cancelled the market for secondary annuities. 

If you’re less than overwhelmed, let me explain.

Back in 2014, Osborne unveiled a surprise package of pensions reforms, declaring “no one will have to buy an annuity”. 

The new “pension freedoms” made it much easier for retiring workers to get access to the cash in their pension. Over 55s could choose between spending the money on whatever they wanted, or converting it into an annuity. This is effectively a deal where you are paid a certain income every year, for the rest of your life. 

This wasn’t just a bung to pensioners – annuity rates have been low in recent years, so retirees were getting less for their savings. For those with tiny pensions, it could make sense. But many in the consumer finance world felt the government was encouraging pensioners to act recklessly. 

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Then, in 2015, Osborne announced a secondary market in annuities. The idea behind it was that retirees who already had bought an annuity could sell it on for cash. 

This scheme was expected to launch in 2016, but it was delayed to 2017, and finally, Osborne’s successor has scrapped altogether.

Simon Kirby, the Economic Secretary to the Treasury, said: “Allowing consumers to sell on their annuity income was always dependent on balancing the creation of an effective market with making sure consumers are properly protected.

“It has become clear that we cannot guarantee consumers will get good value for money in a market that is likely to be small and limited.

“Pursuing this policy in these circumstances would put consumers at risk – this is something that I am not prepared to do.”

Hammond has already distanced himself from Osborne’s flagship austerity plans and axed the deficit target.

While the former Chancellor may feel miffed at another part of his legacy being so quickly erased, this is nothing to what the pension fraudsters will experience right now. The elderly are already a favourite target of white collar criminals, and pension fraud tripled in the wake of the original pension freedoms (which, for now at least, remain untouched). Disappointment doesn’t cover it…

Content from our partners
Future proofing the NHS
Where do we get the money to fix the world's biggest problems? – with ONE
Labour's health reforms can put patients first

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU