Can existing annuity be cashed-in

System

The report in todays's Telegraph suggests it would work by letting people sell their annuity to someone else, but the income would continue to be paid to the new owner only during the lifetime of the original owner.

The snag would surely be that an annuity tied to a very low rate of return is not going to sell for very much?

Pincher

They did the same sort of thing with unwanted endowment policies. With endowments, though, there was a life insurance payout on death, otherwise it's just the maturity value.


With annuity, of course, there is no life insurance element, so I suspect a medical on the annuitant will be necessary. Otherwise, everyone will try to flog their annuity on their death bed.


They will need to improve death reporting/registration.
The annuitant cannot report his/her own death.
The relatives have no incentive to notify the annuity provider.
The new owner of the annuity has no incentive to "hear" about it.


It's possible that borderline cases will want to sell annuities so they qualify for council paid care.

DaveMcG

The more I think about the idea, the more ridiculous it is. Webb has clearly just spouted off without discussing the policy with any stakeholders. Which seems to be his style.

Proxy

DaveMcG wrote: »

The more I think about the idea, the more ridiculous it is. Webb has clearly just spouted off without discussing the policy with any stakeholders. Which seems to be his style.

This is not the first time he's said this very thing, so I was surprised the news have picked up on it today on a bigger scale than last time he said it.

But he did clearly indicate both times that it was his thoughts and not representative of coalition or even lib dem policy. So not sure anyone needs to get excited about it yet.