As if the pension market wasn't complex enough, the Government added a new twist this week with the announcement that the long awaited secondary market for annuities will open in April 2017. The phrase "disaster waiting to happen" springs to mind.

Briefly the idea is that those in annuities, who now want to take advantage of the new pension freedoms, will be able to exchange them for lump sums or income drawdown policies to give themselves greater flexibility over how they access their funds.

Given that the average minister understands pensions about as well as I understand quantum physics, I really don't see this ending well. Of course, it won't cause problems for politicians as they will simply be performing their usual trick of signing off a populist measure, and then dropping the responsibility firmly into the laps of finance professionals who will be expected to guide clients through a decision which epitomises the concept of comparing apples with pears.

We are already spending increasing amounts of time helping people through the workplace pension labyrinth while MPs blithely promise free independent advice to all employees (MPs of course being well known for the huge amount of unpaid work that they voluntarily take on.) But this is going to be even more of a challenge.

How on earth can a lay person establish what is a reasonable price to exchange their regular annuity income for? The pensions industry itself employs actuaries with minds like computers and all sorts of mortality statistics to work out the equation from the other end (i.e. how much income to offer for a lump sum), and even then it's not an exact science: the average person has no chance, and an adviser very little more.

Bear in mind also that annuities have been poor value for years, so there is the potential for a double whammy or poor income going in and a disappointing capital sum coming out.

Perhaps this announcement forms part of some strange political pantomime - it is the festive season after all! (Oh no it isn't!......)

And on that note, Merry Christmas and a Happy New Year!

Robin Sainty APFS M.A. (Cantab)