Britain's watchdog sets out rules on pensions sales ahead of April shake-up

LONDON, Feb 27 (Reuters) - Britain's financial watchdog published rules on Friday covering the sale of pensions ahead of big changes in the industry due to come into effect in April.

The shake-up, first announced by the government in March last year, will give pensioners the freedom to spend their pension savings as they choose. They will no longer have to buy an annuity, which provides a regular income for life.

The Financial Conduct Authority said companies selling retirement products would have to provide "risk warnings" based on an individual's circumstances so they could make an informed choice about their pension.

The FCA advised pension providers to discuss the individual's health and make customers aware of investment scams in the risk warnings.

There have been a number of mis-selling scandals in Britain's financial services industry, including payment protection insurance and interest rate swaps.

The Association of British Insurers said this week that the government and regulators were was not ready for the pensions changes.

UK life insurers such as Aviva (Other OTC: AIVAF - news) and Legal & General (LSE: LGEN.L - news) sell annuities and are looking to diversify into other types of pension, while fund managers are also lining up to offer a bigger choice of retirement products.

(Reporting by Carolyn Cohn. Editing by Jane Merriman)