Annuities will soon be protected 100% by the Financial Services Compensation Scheme (FSCS) if recent proposals by the Prudential Regulation Authority (PRA) get adopted.
The PRA published a consultation paper on 6 October suggesting income and protection life assurance products should be fully protected by the FSCS if the provider firm fails. Currently only mandatory insurance products, such as car insurance, are fully protected, with all other insurance policies awarded 90% protection. The changes would not affect pensions in the accummulation stage, which will continue to be classed as savings products. FSCS chief executive Mark Neale backed the proposals pointing to the potential for consumer detriment life assurance products carry. "Pause fo...
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