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Will you be able to sell your annuity?

[VidSitePro id=106 ][Music] joining me today is rachel lacey editor of our sister magazine how to retire and star she’s going to be talking about the government’s proposal to allow people to cash in their annuities so Rachel what exactly has the government proposed well in the last budget George Osborne basically said the people who’ve already retired should be able to sell their annuities giving them the same freedoms effectively as people who are just retiring now if it is allowed how exactly will it work well that’s the thing it hasn’t convinced oh we don’t know yet the proposals really are just at the consult consultation stage however I think it’s probably important to say it won’t be a case of just selling your annuity back to the insurance company you bought it from rather the industry is looking at developing a secondhand market for annuities so looking for perhaps institutional investors who will take the products on so if that happens what can people expect to get from when they sell their annuity will they get the full value of it no they won’t and they might be quite disappointed with what they get there any investor that purchases your annuity is going to make is going to want to make a profit naturally they’re also going to want to do health checks to check their that income stream their purchasing isn’t going to come to an abrupt halt so and that obviously all comes with cost as well so experts at the moment are saying you could be losing thirty percent if not more of the value of your remaining annuity so that’s obviously quite a lot to chunk and that’s before tax as well so once you take your annuity cash as well you will have to pay income tax at your marginal rate on that money as well so you certainly won’t be getting the full value of your your funds sadly I think people are going to be quite surprised about just how little they get when they cash in their annuity so who is this best suited to you may find they’re people who only have very very small annuities that could only be paying a few pounds a week they may prefer to have a cash lump sum rather than that very small income for life it means they can do something meaningful with the money whether that’s you know paying off debts or dealing with some other expenses they might have in the early years of their retirement at least they’ve got the lump sum their to do as they choose because obviously for some people you know five pounds a week it’s not really going to make a big difference to their overall standard of living in retirement so if you’ve got an older person who’s got an impaired annuity on in Houston USC well will they be able to find a buyer will someone want to buy these these kind of products these are questions that will hopefully be answered during the consultation process we just don’t know at this stage because I mean if somebody already has an enhancing you attea already means their their life expectancy isn’t going to be as long as a healthy person so their income stream isn’t going to run as long for the investor so you might ask why would they want to purchase that especially if their health is deteriorated in the mean time so these are questions that we need to work through during the consultation process if the government does give this to go ahead when exactly will it come in George Osborne says he wants it to start happening from April 2016 so next year whether it will happen at all whether it happened before then remains to be seen thanks very much Rachel thanks [Music]

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the author of 10+ books about health, civil society, popular power, uprisings, art, environment, place, pleasure, politics, hope, and memory. She is a Harper’s contributing editor.” Our company believe every person is entitled to access to credible information. That's why we select to maintain our reporting open for all readers, no matter where they live or what they can afford to pay. The MetubeOnline.com has no shareholders or billionaire proprietor, suggesting our journalism is without prejudice and also beneficial interests-- this makes us different. Our content freedom as well as freedom enables us to offer courageous examinations and also evaluation of those with political and commercial power. We can offer a voice to the oppressed and also disregarded, and assist cause a brighter, fairer future. Your support shields this. Every contribution, however huge or little, makes a difference. Assistance the MetubeOnline.com from as low as $1-- and it only takes a minute. Thanks.

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