Govt rethinks 'confusing' guaranteed annuity rate valuations

Valuing safeguarded benefits too complex

The valuation process when assessing guaranteed annuity rates is to be simplified meaning fewer people will be required to take financial advice before giving up their safeguarded benefits, the government has said.

Since pension freedom was introduced, in April last year, people with a guaranteed annuity rate valued at £30,000 or more have been forced to take financial advice before giving up the benefit. It was thought these safeguarded benefits should be subject to financial advice to enhance consumer protection, however, determining the true value of the benefits has been flagged as complex and confusing. The government launched a consultation on the issue last year and responded this week. It said it would amend the Pension Schemes Act 2015 so that for the purposes of the advice requireme...