Osborne's latest policy

jamesd

It's not particularly personal since it applies to most people sold a standard annuity in the last five or so years and most sold one in the predictable future.

It should be easy for an IFA to recommend selling an annuity and deferring the state pension if that produces more income. A practical difficulty for an IFA may come if they originally sold the annuity and didn't recommend deferring the state pension instead.

wakeupalarm

Surely this is a windfall for those with guaranteed annuities. Guaranteed 14% annuity bought with a fund of £100,000, now worth around £400,000.

DaveMcG

jamesd wrote: »

It's not particularly personal since it applies to most people sold a standard annuity in the last five or so years and most sold one in the predictable future.

It should be easy for an IFA to recommend selling an annuity and deferring the state pension if that produces more income. A practical difficulty for an IFA may come if they originally sold the annuity and didn't recommend deferring the state pension instead.

Its personal in as far as the sums for any particular pensioner and their other resources and risk profile might or might not justify selling their annuity. For instance, the annuity might be quite large in comparison to the state pension. I doubt that it will be possible to split it.

There is also a risk that a cash strapped government freezes the state pension (they will probably justify it by saying they gave everyone a big increase to £150 :rotfl:)

jamesd

Ah, you were using "personal" as I'd use "individual". Agreed.

As well as that political risk there's also the possibility of moving abroad to a place where there are no inflation-linked state pension increases.

DaveMcG

wakeupalarm wrote: »

Surely this is a windfall for those with guaranteed annuities. Guaranteed 14% annuity bought with a fund of £100,000, now worth around £400,000.

And a tax bill so large that even HMRC would be embarrassed.

redux

wakeupalarm wrote: »

Surely this is a windfall for those with guaranteed annuities. Guaranteed 14% annuity bought with a fund of £100,000, now worth around £400,000.

When could you have bought that rate?

1994? 1997?

kidmugsy

DaveMcG wrote: »

And a tax bill so large that even HMRC would be embarrassed.

Not if the purchase money is allowed to be put into a pension. Then you can take some and keep the rest for a bequest.


I shouldn't be astonished if it all went ahead and then potential buying firms found the market unprofitable and so withdrew. There's only one way to find out.

Anyway, everyone is ignoring a potential side benefit: it might stop some of the whining about "I was forced to buy an annuity". Unfortunately the Law of Conservation of Whining means that something else will be found to whine about. "I was forced to sell my annuity for tuppence ha'penny."

kidmugsy

BobQ wrote: »

Surely they have no incentive to offer a good deal?

The incentive will be competition in the market.

kidmugsy

DaveMcG wrote: »

As other have pointed out the annuitant can't possibly get anything like the correct value.

"Correct value": what on earth are you talking about?

kidmugsy

Murphybear wrote: »

I am one of those who took out a small annuity (£800 pa) just before they changed the rules

Which rule change are you referring to?