If you already have an annuity what can you do?

Independent Financial Advisors at Enable in Bishop’s Stortford have a huge amount of experience in helping people manage their pensions but if you have already retired and have an annuity you might be wondering what’s in it for you with all the new pension freedoms due to come in this April. Pensions minister Steve Webb has come up with an idea and recently said he would like pensioners to be able to trade in their annuities for cash. The proposed changes could also create a “second hand” annuity market; other firms could bundle up individual annuities and sell them on in bulk.

 “I want to see people trusted with their own money wherever possible. I have already heard from people around the country who would like to see this change made” said Webb, “I want to see if we can get these freedoms extended to those who are receiving an annuity but who might prefer a cash lump sum.”

His argument is that up to five million pensioners are unable to access the pension freedoms set to come into force this year. He said: “As things stand, once an annuity is in payment there is very little that an individual can do if they would prefer instead to have a cash lump sum or some combination of cash and reduced income.” Under his proposed plans, once an annuity had been sold payment would be redirected from the policyholder to another account holder, probably an insurer or pension fund. Then the pension would continue to pay out until the original policyholder died.  Webb is keen to launch a consultation on the proposals and agree a Coalition plan for the reforms ahead of the general election in May. Watch this space.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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