Well we weren't expecting that. Exciting to think that this regulatory change might give new digital platforms like Personal Capital, Betterment and NextCapital an additional opportunity to hoover up some of the estimated 15 bln sterling a year that used to get pumped into the UK Annuity market.
The dramatic liberalisation of Britain's pension system unveiled in the budget is likely to pump up house prices, spark a bonanza for estate agents, car dealers and cruise ship operators – and could deal a devastating blow for the UK's £14bn annuity business. George Osborne's budget on Wednesday – in which he declared that "no one will have to buy an annuity" – swept away most of the regulations on pensions, freeing savers to do what they like with their retirement savings, starting from April next year. And on Thursday pensions minister Steve Webb said it would be "their choice" if retirees spend their pension pots – which average £30,000 – and end up relying on the state pension. Judging by the experience of Australia, a huge number of the 400,000 who retire with a pension pot in Britain every year will indeed choose to blow their savings on holidays and cars. And those with bigger-than-average pots will purchase property – particularly buy-to-let – which could further inflate house prices.