Binned plans for a secondary annuity market cost the financial services industry upwards of £10m, pensions and benefits consultancy Hymans Robertson has calculated.
Earlier this month, HM Treasury announced plans to allow pensioners to sell their annuities would be scrapped just months before implementation.
The secondary annuity market was originally supposed to be launched in April 2016, but was then pushed back to April 2017.
Douglas Anderson, partner at Hymans Robertson, told FTAdviser many types of organisation have been affected by the secondary annuity market proposals on both the sell and the buy side, as well as intermediaries between the two.
He said on the sell side, the most affected are current and past annuity providers, as he said it would have been "unprofessional" for them to not plan for the implementation, and will have had to decide whether to offer to buy back their own annuities and at what price.
On the buy side, potential purchasers of the secondhand annuities would have been developing pricing policies, paying medical underwriters and longevity reinsurers to calculate those.
Mr Anderson said: "Intermediaries would have included annuity brokers, IFA networks, wealth managers and advisors to workplace schemes.
"If you tot up the likely costs incurred by all these organisations, you quickly get beyond £10m and more likely a multiple of several times that figure.”
Andrew Gething, managing director of medical underwriting business said the costs for his business alone were £100,000.
However he put the figure for the industry as a whole at a more modest £4m-£5m.
Mr Gething told FTAdviser: "Fortunately as a specialist fintech medical underwriting company we were always going to re-use our existing technology, so the impact on us has not been too detrimental."
Steve Lowe, communications director at Just Retirement Partnership said the firm spent "material hours of senior management time over the last two years".
Paul Lindsay, chief executive officer of the Annuity Trading Exchange said his firm had been involved with HM Treasury and insurers for the last 18 months in developing an automated bidding trading platform for both consumers and IFAs to be able to use.
He said: "In terms buying demand, we were talking to a number of investment houses that were keen to buy books of annuities to hold on the balance sheet, which we would of facilitated through a buy and aggregation model on our platform.
"With current pensions freedoms established it seems extremely unfair to 5m UK consumers to not give them the same flexibility."
Legal & General backed website AuctionMyAnnuity went live earlier this year in preparation for the launch of a second hand annuity market in April 2017.
The website directors admitted after news the second hand annuity market would not go ahead they were "disappointed" and their website would fold.
John Lawson, head of policy for retirement solutions at Aviva said the detailed regulations around secondary annuities were never finalised so very little work had been done to adapt Aviva's systems ahead of the proposed introduction of the market.
