Pensioners may bear the burden of insurers' losses

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Pensioners may bear the burden of insurers' losses

LONDON, UK - Insurance companies have hinted they may reduce or renege on annuity payments to future pensioners because of lack of funds, according to a government adviser.

Ros Altmann, an independent pensions adviser, believes the government should share the insurance risk and for annuities to last ten years to protect insurers from an open ended risk.

Insurers are concerned that increased life-expectancy will mean fewer funds to share out.

Ten billion pounds worth of annuities are bought each year, however, the total market share is just £40 billion

Annuity schemes for younger members could have to be guaranteed for up to 50 years and insurers say there are not enough gilt assets to back the risk.

The potential crisis comes in the wake of an early-day motion calling for compensation for victims of collapsed pension schemes.

Signatures have been collected from 199 cross-party MP's.

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