Pensions: Sale of Annuities

Lord Tugendhat Excerpts

Wednesday 19th October 2016 Lords Chamber

[Lord Young of Cookham]

I think the noble Lord is suggesting that, rather than the private sector providing an option for these annuitants, the Government should have provided it. That was never the proposal and he will know that, along with the other pension freedoms, they are operated by the private sector. Those who opt out of their pension to use the other options do so without resorting to a government scheme.

[Lord Tugendhat (Con)]

My Lords, I congratulate the Government on reversing a bad policy, on doing so both quickly and courageously, and on the clarity with which the Minister has justified it. The points he has made demonstrate clearly that the decision that has now been taken is the right one and that it is always better to learn from experience, so Governments should be congratulated when they do so.

[Lord Young of Cookham]

I am enormously grateful to my noble friend, who has good knowledge of the workings of the City. As he implied, it has become increasingly clear that creating the conditions that will allow a vibrant and competitive market to emerge, with multiple buyers and multiple sellers of annuities, could not be balanced or achieved without sufficient consumer protection. After having drilled down and consulted regulators, consumer organisations and other stakeholders, the Government have come to the conclusion that it would not be in consumers’ interests to continue with this policy.