- The Government's new champion for older workers is challenging the Financial Conduct Authority to explain how the current sales practices are fair to customers.

Ros Altmann - who was appointed to the new role last month - says the case of Wayne Davies vividly highlights the injustices of the UK annuity sales process.

He emailed Altmann in desperation, after both his pension provider - Royal London - and the annuity company it had a tie-up deal with - Prudential - denied responsibility for selling him an unsuitable product.

Altmann said: "In March 2013, Mr. Davies, now 62, was in poor health and needed his pension after being made redundant. He was undergoing tests for cancer, had a history of heart trouble, was partially disabled by polio and had smoked for forty years. He was sent many pages of paperwork by his pension provider, full of terms he had not come across before. He had saved £27,000 with Royal London, which does not itself offer annuities.

"Instead of sending their customers to a service which would help them choose the right type of annuity at a competitive rate, it had a tie-up deal with Prudential, under which it received 2.5% commission on each annuity sale.

"The terms of the deal did not require the Pru to offer annuities which catered for people in poor health, nor ensure competitive rates for the standard annuities. Mr Davies did not understand annuities and was offered his tax free cash plus a standard single life annuity at a 4.4% rate - giving him around £17 a week.

"He was in such poor health that this cannot be considered a suitable sale, yet there are no regulatory controls to protect customers such as this properly.

"The Regulatory system and pension companies leave it up to each individual to know what to do. Two weeks after he bought the annuity, he was confirmed as having cancer. He immediately wrote to Royal London but was not told that he could have undone the annuity at that time within the 'cooling off period'. He subsequently realised that this annuity was not right for him and went to his MP, who wrote to Royal London and the Prudential but each blamed the other and he received no redress. A complaint to the Financial Ombusman has also delivered no result."

Altmann added: "I want to make it clear that annuities can work well for some customers, but the current sales process fails to ensure the right type of products are sold to the right people."

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