Government withdraws plans for secondary annuity market
The Government has announced that it will no longer go forward with plans to launch a secondary market for selling annuities next April.
Customers started to contact TPAS asking about “cashing in my pension” in March 2014, highlighting a misunderstanding of the Chancellor’s original announcement for cashing in pension pots. These calls have continued following the announcement in Budget 2015 that a secondary market in annuities would be launched.
A common misperception of customers was that any pension could be sold, including pensions paid by final salary schemes, not just those pensions being provided through an annuity product. The other misperceptions were:
- the process will be handing their annuity back to the current annuity provider and getting most or all of the original purchase price back; and
- that the annuity is “small” and/or policyholder being “in poor health” are good reasons for selling the pension.
Following the latest announcement that customers will not be able to sell their annuity, we will be contacting TPAS customers to offer a further conversation to discuss other options available to them and, where appropriate, direct them to other bodies who may be able to help.
Michelle Cracknell said “Often the presenting question that we get asked like “Can I sell my annuity” is not the customer issue. We can talk to the customer about what they need and present them with all the options. For those approaching retirement, buying an annuity remains an important consideration when thinking about their options.”
For anyone who was thinking of selling their annuity, they can contact The Pensions Advisory Service on 0300 123 1047 to discuss their pension position.