Annuity Surrender Value?

007gooner

I have held a Annuity Growth Account since 2007, value £25,509 which pays an income of approx. £1200 annually.


My 3 year review ends in Feb 2015 and I would like to cash it in under the new rules April 2015, as it would help to pay off all my debts etc.


I have been informed by Canada Life that there is no surrender value on these policies, although I can move it to a new provider.


Is this my only option? I have 2 credit cards I need to address plus find a new job. Problem is, as I am now a very fit 60, I just cant get the interviews.


Would welcome some ideas...! Thanks

kidmugsy

Is it the only pension policy of any kind that you have?

Your_Hero

What you have purchased is a Flexible Annuity which is dependent on investment growth and is reviewable 3-yearly. You cannot cash this plan in because it is written under the same rules as a traditional annuity. But it can be transferred as they've told you at the 3-year review date or you can buy a lifetime annuity with the remaining funds.

https://ifazone.canadalife.co.uk/public/stellent/groups/portal/documents/S4_001460.pdf

dunstonh

I have been informed by Canada Life that there is no surrender value on these policies, although I can move it to a new provider.

Until the rules come in after April 2015 there is no point asking your options now. They will be based on current legislation. Not proposed (but subject to change) legislation.

It is possible the rules will change for this plan in 2015 but they may not (more likely to be probably not). However, until then, it wont be possible to know.

bmm78

With the Annuity Growth Account (AGA), please bear in mind that if you don't make a decision within 60 days of the Review Date, Canada Life reserve the right to convert it into one of their Lifetime annuities.

This could leave you worse off, as Canada Life may not be offering you the best annuity on the market, it may not take full account of your upto date lifestyle/medical factors, and you may not even want a lifetime annuity at all.

Based on the fact that the product is written under annuity rather than drawdown rules, and historically the transfer value could only be used to buy an annuity, it is very unlikely that there will be any more options available post April 2015. Canada Life have indicated that their understanding is that it will not be possible to move the policy into a drawdown arrangement or take as a lump sum.

The two caveats to this are that this is only based on current understanding of rules that have yet to come into force, and that under the proposed new rules it may theoretically be possible to purchase an annuity that starts off with the vast majority of the pot, and then pay a trickle for the rest of your life (thus achieving a similar effect to "cashing it in"). It's highly unlikely though that such a product would be available off the shelf in April 2015, even if legislation allows it.

You could wait until April on the small chance that there are more options for this product, but you could then be cutting it very fine with regards to the 60 day window (depending on what date in February it is).

007gooner

kidmugsy wrote: »

Is it the only pension policy of any kind that you have?

No, I have another small annuity policy running but I would like to do something with the Canada Life policy or put it into bricks and mortar!
if possible