Selling Active Annuity (UK)

TinaWillows

Hi


I need help so so badly please:


I'm 55 but I have an active annuity which started paying out when I hit 50.


When I bought the annuity I was in a high-paying job, putting 5 kids through Uni, and imagined I was investing in a safe future, possibly early retirement, or at least would allow myself to cut back work as the kids left home & I got that bit older. And, of course, I thought I'd live forever.


It never occurred to me I might fall ill and be unable to work before I was ready to stop.


I also didn't realise my hard-earned investment would pay so little pa I'd have to live to approx. 150yrs to even break even.

And the thing that hurts most, the thing I NEVER knew and would NEVER have taken the annuity out had I realised is, if you fall ill, disabled, and claim benefits, they just deduct your monthly annuity payment from your benefit entitlement (that's the benefits I contributed to by paying over £250K bloody tax my whole bloody life). So it's worthless, meaningless. It doesn't help me at all.


Why the hell didI bother??


My investment was £22.5K. I get £103 per month - set in stone forever - won't increase or decrease.


I've worked my entire life, never claimed a thing until last couple of years when I fell genuinely, seriously ill and was left with a handicap.


My savings are all gone, then I had to claim benefits and now I'm living well beneath the breadline, have to choose between heating or eating, whilst the benefits system I paid into isn't there anymore and the final safety net I put in place for myself, my annuity, is simply taken away.


I feel so conned


So the annuity is worthless to me. And my disability can't 'get better' so, even if I get a part-time job (which I'm trying to find), it will remain useless as I'm never again going to be able to work 40+hour weeks. It will only ever be a deduction: I worked hard, saved & tried to be sensible and all I've achieved is a contribution towards some fat lazy MP's second home or to finance some demented old git who clocks in the House of Lords for 5 minutes a week.


Bitter? You bet I am!


Anyway. When Osborne said we could sell annuities I was ecstatic - it would (literally) be a life-saver for me. But he's put it off for a year. And I think a new chancellor could cancel it anyway so there's no guarantee it'll really happen.


However, when I was reading news reports, they mentioned that this new plan, allowing us to sell active annuities at 'basic' tax rate, would be much better than what we can do at the moment, which can result in us paying 50% tax...... 'what we can do at the moment' ?? ..... we can sell them now??


I'd happily pay 50% tax in order to eat, turn on the heating and invest in a business I can run from home!! And it would make sense for me to do so - I hope I've explained that sufficiently, to save anyone telling me about safety in retirement.


Remember, I will never profit from the monthly payments, plus I'm starving and freezing now, plus my only long-term hope is to get some cash to invest in a home-business start-up.


So, please, can anyone tell me how to sell an active (UK) annuity now?


I'd really appreciate any advice.


Thank you
Tina x

castle96

no advice Tina, but joining your thread to keep informed. This annuity selling thing is going to be interesting

Drp8713

TinaWillows wrote: »

I also didn't realise my hard-earned investment would pay so little pa I'd have to live to approx. 150yrs to even break even.

My investment was £22.5K. I get £103 per month - set in stone forever - won't increase or decrease.

£22500 / £1200 p.a = 18.75 years until you break even.


Considering you took it out at 50 you only have live until you are 69 and you are in profit ignoring inflation

TinaWillows

Hi Castle


Your company is appreciated regardless

jamesd

If you were to sell your annuity you would be subject to the "deprivation of income" rules. Those mean that even though you no longer have the annuity income you would be treated as if you still did. These rules are there to prevent people from discarding income or assets to help them to get more in benefits.

The annuity income will be more useful once you are no longer on means tested benefits, either ate state pension age or when working enough not to get means tested benefits.

TinaWillows

Drp8713 wrote: »

£22500 / £1200 p.a = 18.75 years until you break even.


Considering you took it out at 50 you only have live until you are 69 and you are in profit ignoring inflation

Maths was never my strong point And I admit I may have used an exaggerated guess on that one due to my incredibly bad mood about this


Sorry. But everything else in my post is 100% accurate.


And the chances of me lasting another 18.75 years in present circumstances ain't good: They're fining me £30/month because they overpaid me last year (their fault not mine) and, after Direct Debits (Water, basic internet, rent, council tax, tv licence) I'm left with £20/week for food, clothes and pre-pay elec/gas meters. Can't do it.


My doctor now says I'm 'A-typical Anorexic' .... apparently 'Anorexic' only means dangerously underweight, whilst 'A typical' means you're underweight for reasons other than a body dysmorphic thing trying to be thin. I'm not trying to be thin. I can't afford food. He says my organs are shutting down or something now. They're threatening to force me into hospital.


I can't work because I was hospitalised with double pneumonia two years ago - really bad, intensive care. When I recovered I was left with lung damage (COPD), it's like really bad asthma. It's a handicap, there's nothing I can do to make it better and it's progressive, it will get worse and I can't stop that either.


I've worked all my life. I've contributed 1,000,000% to the 'safety net' we are told will cover us for something like this. And it's not there. I'm freezing and I'm starving. What the hell did I do wrong??

TinaWillows

jamesd wrote: »

If you were to sell your annuity you would be subject to the "deprivation of income" rules. Those mean that even though you no longer have the annuity income you would be treated as if you still did. These rules are there to prevent people from discarding income or assets to help them to get more in benefits.

The annuity income will be more useful once you are no longer on means tested benefits, either ate state pension age or when working enough not to get means tested benefits.

ohhh no Thank you James xx I didn't know about deprivation of income - I'll google it now.


Would still like to sell the annuity though: I'm not well enough to get employed, I have to help myself. I'm a fighter I can do it and I've already got a few ideas but I need start-up funds. I can't risk borrowing because I can't risk debt. Even without the annuity income, the lump sum could finance the start-up and see me through till I'm in profit.


Do you know if there's a limitation on how long they treat you as if you still have the income you've 'deprived' yourself of?


Thanks

Dunnit

There is no way to sell an annuity at present and you would not benefit if you did.
Perhaps the Benefits board may be of more help.
In the meantime perhaps one of the 5 children you put through university could give you a meal or two.

TinaWillows

Dunnit wrote: »

There is no way to sell an annuity at present and you would not benefit if you did.
Perhaps the Benefits board may be of more help.
In the meantime perhaps one of the 5 children you put through university could give you a meal or two.

They do


But ........ ah you know, feels bad, I try to cover up with them. Parents shouldn't take money from their children - not at my age - it's not fair on them. They're working hard, buying their own homes .... I'm really really proud of them but they're only aged between 19 - 27 (I had twins), just building their lives. I've told them I expect a very posh nursing home in return for uni but not yet! They're too young, it's not fair x

Linton

Are you sure that you are getting all the benefits to which you are entitled? The benefits forum may help.

I was a little surprised by Jamesd's reply as I was unaware that you could sell an annuity now in the UK. All the government appears to be promising is to change the tax laws to allow it from April 2016 and to consult on how a market in second hand annuities could be set up. There is no certainty as to when such a market would exist and how highly an annuity would be valued. It seems a reasonable guess that its value will be much less than the sellers hope.

TinaWillows

Dunnit wrote: »

There is no way to sell an annuity at present

No way at all?


I've found an article similar to the one that made me think it might be possible. It was in the Telegraph.


They said: 'Under current rules, people who wish to sell their annuity income face a tax charge up to 70pc. The changes, which the government hopes to introduce next year, will mean people are taxed only at their marginal rate.'

'Under current rules'?


I've got the link but site won't let me paste it cos I'm a new member. Without linking, it's:

telegraph.co.uk / finance / budget / 11473624 / Budget-2015-savers-must-be-put-at-heart-of-pensions-shake-up . html