Selling Active Annuity (UK)

TinaWillows

Linton wrote: »

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.

I think James was saying 'even if' - warning me I'd still get the deduction even if I managed it - rather than confirming the sale was possible


And yeah From what I've read about the budget, you're spot-on: They're going to *allow* us to sell our annuities (which already belong to us and should therefore be ours to sell already arrrgghhhh). And yep, I'm thinking what you're thinking, even if it does go through next year, it'll be a buyers' market and we'll have to take big losses: Probably no less than the loss I was assuming having read the Telegraph article I quoted.


I am getting all benefits I'm entitled to. I was almost managing until I had to make my annual visit to ATOS and I just couldn't be assed arguing with their usual assessment, assuming anyone who can speak 2 coherent sentences and raise their arms above their head is ready for fulltime work.


They've worn me down. Can't fight 'em any more. Need to fix it myself x

cte1111

Tina, have you done a Statement of Affairs? This means putting down all your income and outgoings, so people can then try to help. If you are genuinely unable to afford food, then something needs to be done ASAP. Many benefits are not means tested, e.g. Disability Living Allowance, so you will still be receiving those hopefully.

Linton

TinaWillows wrote: »

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

It may have been theoretically possible but as far as I know no-one has actually provided a service to buy them in the UK. Perhaps because the tax implications made it uneconomic.

dunstonh

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.

That does not sound at all correct. You would expect somewhere in the region of 13-30 years at that age.

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.

That was always unavoidable. Benefits are there to help those without. Not those with.
However, are you sure you are getting the benefits you are entitled to? The pension would result in a reduction but not a £1 for £1 reduction. So, you should still be better off compared to not having it. Plus, the amount is not enough to take you out of benefits.

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

So, return of capital will take just over 13 years (after 25% tax free cash taken)

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.

I sympathise with your situation but you never saved hard and you were not sensible. A pot of £22.5k at age 50 is woefully low. You dont appear to have had any insurance either.

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.

At least a year and only if they get into power. it wont be a life saver for you either as you will get nothing near what you probably expect.

They're going to *allow* us to sell our annuities (which already belong to us and should therefore be ours to sell already arrrgghhhh).

Legally, they do not belong to you. They are a trust based arrangement.

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

you cant.
Even if the Conservatives get into power next time and the legislation is changed, you will not get anywhere near the pension value back. It will be taxable and the lump sum would be factored into means tested benefits.

TinaWillows

cte1111 wrote: »

Tina, have you done a Statement of Affairs? This means putting down all your income and outgoings, so people can then try to help. If you are genuinely unable to afford food, then something needs to be done ASAP. Many benefits are not means tested, e.g. Disability Living Allowance, so you will still be receiving those hopefully.

I haven't ..... haven't even heard of it. I will Google that too thank you xx

Pincher

Getting an annuity at age 50 is an odd thing to do.


Was there a "financial adviser" involved?


Before you suicide bomb the salesman from hell, who condemned you to lingering penury, think about mis-selling compensation, which is the fashionable thing to do.


Hunger Games - Mockingjay: "If we burn, you burn with us."

TinaWillows

dunstonh wrote: »

That was always unavoidable. Benefits are there to help those without. Not those with.


I am without.
And I have contributed to the safety net which is supposed to be there if we're genuinely ill, which I am.
And I have never claimed in my life before - never claimed when I was 'with'.
And even when I fell ill, I still didn't claim, I used all my savings before claiming a thing.

However, are you sure you are getting the benefits you are entitled to?


Yep. They give with one hand, take away with other. And, as I said, they've worn me down, I just can't fight them any more. If I was healthy I'd be able to. But if I was healthy I wouldn't need to would I?


The pension would result in a reduction but not a £1 for £1 reduction. So, you should still be better off compared to not having it. Plus, the amount is not enough to take you out of benefits.


It's deducted £1 for £1.


So, return of capital will take just over 13 years (after 25% tax free cash taken)

Return of capital. Plus the investment earnings over past 20 years they've had it, even at basic bank rates, although if I'd invested it I'd have got a better return elsewhere. Plus investment earnings subsequent & future years.


I sympathise with your situation but you never saved hard and you were not sensible. A pot of £22.5k at age 50 is woefully low. You dont appear to have had any insurance either.


I was a single parent to FIVE children. All the same father - we divorced '98. He didn't pay anything. I raised them ALONE. I worked THE WHOLE TIME. I fed them, clothed them, bought uniforms, paid dinner money, school trips, PE kit, car, tax & petrol to taxi them to after school things and then I put ALL 5 OF THEM through Uni and they all got degrees and they're all now employed in good jobs.


How the HELL could I also 'save hard'?? You think it wasn't hard to save what I managed in those circumstances?? And 'not sensible'?? Would it have been more 'sensible' to let my kids starve or not go to Uni whilst I increased my 'pot'?

Legally, they do not belong to you. They are a trust based arrangement.


Well I guess I should have been more careful who I trusted eh?

you cant.
Even if the Conservatives get into power next time and the legislation is changed, you will not get anywhere near the pension value back. It will be taxable and the lump sum would be factored into means tested benefits.



I know I won't get the value. I'd be happy with half, even quarter.


Ah what the hell.

cte1111

Here's a link for an SOA:
http://www.stoozing.com/calculator/soa.php

Good luck. It sounds like you might well need to carry on fighting your disability assessment. I know this can seem endless but starving yourself cannot be a better option. Perhaps support in writing an appeal might be something that one of your children could help with?

TinaWillows

Pincher wrote: »

Getting an annuity at age 50 is an odd thing to do.


Was there a "financial adviser" involved?


Before you suicide bomb the salesman from hell, who condemned you to lingering penury, think about mis-selling compensation, which is the fashionable thing to do.


Hunger Games - Mockingjay: "If we burn, you burn with us."

Hi


Yep there was an FA or Accountant: I was earning good money then. Accountant told me I had £20K'ish free end of year, said would make sense to invest in an annuity, I said OK and he did it.


50 was cos the only other thing he asked me was when would I like to start getting it, and I thought would be nice to start it early so I could start to wind-down a bit.


Having said all that though, I have no idea any longer who the Acc/FA was and any papers from back then were shredded long ago so, although I genuinely wasn't given any details about the annuity, I don't think I could do one of those claims xx

gterr

I would recommend you go your nearest Citizens Advice Bureau and take with you details of your income and expenditure and any savings. They can carry out a benefits check for you to find out your entitlement.


If you are of working age and unable to do a job because of illness or disability there is a benefit called Employment and Support Allowance. If you need help with daily living tasks or mobility there is another benefit called Disability Living Allowance (or Personal Independence Payment if this has been rolled out to your area). In some circumstances you can get both benefits at the same time.


You have to actively apply for these - the government will not automatically do this for you. CAB will help.