LONDON, June 9 Britain's financial watchdog has
changed the scope and timing of a study into the annuities
market in response to unexpected reforms announced by the
The Financial Conduct Authority in February had published
plans to review annuities - products sold by insurers that pay
an income until death in exchange for a retiree's pension
The review found that the annuities market was disorderly
with too little competition and the FCA launched a study of
sales practices which was due to be completed in the summer.
But in March Britain's finance minister George Osborne
unveiled a shake-up of the pensions system that effectively put
an end to an obligation to purchase an annuity with retirement
This effectively dismantled a captive market for annuity
providers such as Prudential Legal & General
and Friends Life, which will now have to compete for
pensions business against other investment products.
This means the FCA's review needs to change to take into
account the reshaped market for retirement products that is
likely to emerge, the watchdog said on Monday.
"New products and business models are likely to arise," the
FCA said. "We will look to understand how the market is likely
to develop in these respects and in relation to existing
products in order to identify potential competition risks and
vulnerabilities to consumers in the new landscape."
The regulator said its original study of how annuities were
being sold was part of a broader review of retirement income.
Its review of annuities will now be conducted as a standalone
study with results reported towards the end of 2014.
(Reporting by Chris Vellacott. Editing by Jane Merriman)