'Better regulation' of annuities needed

The sale of annuities is not being regulated properly by the Financial Services Authority, one expert has claimed.

Dr Ros Altman, a pensions specialist, noted that consumers have been "badly let down" by the system.

She added that individuals may be sold this product when they stop working, regardless of the fact that they do not know what it is.

Dr Altman commented that very often people will not have the risk of the scheme explained to them properly.

An example she used was when married men take out a single life annuity, which will leave their widow penniless if they pass away first.

According to Dr Altman, the decision by the government to bring in a national financial advice service is "long overdue".

With the majority of those purchasing an annuity having a small pension pot, she noted the need to have guidance.

This follows the comments of industry practitioner Keith Churchouse, who observed that any plans for pensions will have a major impact on retirees.