Selling Active Annuity (UK)

TinaWillows

cte1111 wrote: »

Here's a link for an SOA:


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?

Thank you so much cte xx

TinaWillows

gterr wrote: »

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.

Thank you gt


But I was on ESA - and you have to attend an ATOS check each year. All ATOS do is speak to you, ask you to raise your hands above your head and watch you walk approx. 20'. That's it. Doesn't matter if you have x-rays, scans, etc. illustrating a disability - they don't look at your med records - if you can do those three things they say you're capable of fulltime work and then you have to appeal to prove otherwise. First time I appealed - it's a soul destroying process. I know I could appeal again, the lady at the jobcentre has even told me to, and I know I'm entitled to it, but I just ain't got it in me. **** them.


I receive DLA at the lowest rate - approx. £20/month. I'm really entitled to a higher rate plus mobility but most people who apply for more get turned down, and if that happens you also lose whatever you're getting. I can't risk losing what I get so I daren't try.


Honestly. Heads they win, tails you lose. That's it. I need to do something to save myself - and that means working. I can't travel to work - I sold my car for living expenses before I gave up & claimed benefits and the breathing thing stops me using public transport cos I can't walk that far. So I have to work from home. I WANT to work from home (I'm bored s**tless doing nothing!). But there's no home jobs - I've searched - so it's up to me. I can do it but needs basic start-up investment. If I can release my money, that's what it's for xx

TinaWillows

Just a quick thank you to everyone who has taken time to reply - it's really appreciated


I have to log off now and don't want to look anti-social by not replying to anyone who might post later


(my Mum was really strict about manners and has obviously left me with some sort of trauma which only intense therapy will fix. Meanwhile I can't leave without apologising.) xx

Pincher

TinaWillows wrote: »

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.

Let me try to restructure that. You had £20k that would incur higher rate tax, so if you didn't do anything, you end up with £12k in your pocket, and £8k goes to HMRC.


By paying £12k into a pension pot, it attracted £8k tax refund.
You now had £20k in a pension pot, which normally would just sit there and grow up and down, and hopefully up enough when you are ready to retire.

TinaWillows wrote: »

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.

You chose age 50 because you thought you would get more by virtue of getting payments for more years. This is true for a building society deposit account. If you have £20k generating 5% interest a year, collecting for 30 years will obviously be more than 20 years. You also still have the £20k at the end of 30 years. Obviously not so with annuities.


Annuity providers are not stupid. The longer you are expected to live, the smaller the annual pay out they will offer. On the other hand, if you are 65 years old, have diabetes, heart problems and a family history of strokes, the annual pay out will be very generous, because they already got your coffin ready.

TinaWillows wrote: »

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

The annuity provider should have records.
Sadly, it's probably already been bought and sold a few times, and no one has a clue how to find anything.

TinaWillows

Pincher wrote: »

Let me try to restructure that. You had £20k that would incur higher rate tax, so if you didn't do anything, you end up with £12k in your pocket, and £8k goes to HMRC.


Yes! That's it thank you That's what he said (only remembered it when you spelt it out)

By paying £12k into a pension pot, it attracted £8k tax refund.
You now had £20k in a pension pot


Yep...

You chose age 50 because you thought you would get more by virtue of getting payments for more years. This is true for a building society deposit account. If you have £20k generating 5% interest a year, collecting for 30 years will obviously be more than 20 years. You also still have the £20k at the end of 30 years. Obviously not so with annuities.


Nah Remember I don't do maths That would probably have been a sensible thought but didn't even occur to me: I chose 50 cos I knew by then I'd have got most of the Uni stuff out the way, would be exhausted and, because I never factored-in getting ill, thought I'd have my nest-egg (savings which I've now lost) and with the annuity too would be able to take life a little easier.

Annuity providers are not stupid. The longer you are expected to live, the smaller the annual pay out they will offer. On the other hand, if you are 65 years old, have diabetes, heart problems and a family history of strokes, the annual pay out will be very generous, because they already got your coffin ready.



hmmm .... I almost started looking into transferring the annuity with updated health records to get a better payment when you said that. Then I remembered, if I get more they'll just deduct more, so no point (plus I suspect adding iffy health info would affect potential re-sale value in 2016).

The annuity provider should have records.
Sadly, it's probably already been bought and sold a few times, and no one has a clue how to find anything.


Yeah exactly. And sometimes it's better to simply accept life's too short to bother

Thanks Pincher you've really clarified my thoughts and helped me remember/understand what I have here. Only £12K of it was really mine ......... knowing that alone will make the inevitable loss when/if I can sell much easier to bear


Gotta run off again now but really pleased I posted here - I may not have solved my problem but at least I understand it better!

coyrls

I might have missed something but how can you purchase an annutiy from a pension fund at 50? Surely the earliest you can get access is 55. If it wasn't purchased from a pension fund (unusual I think), then you would have had no tax relief on your contributions.

dunstonh

Thanks Pincher you've really clarified my thoughts and helped me remember/understand what I have here. Only £12K of it was really mine ......... knowing that alone will make the inevitable loss when/if I can sell much easier to bear

£12k was yours. 8k obtained in tax relief. When the annuity was bought, you would have got 25% of that £20k back. So, £5k returned. So, net cost to you was £7,000.

I might have missed something but how can you purchase an annutiy from a pension fund at 50? Surely the earliest you can get access is 55.

It used to be 50 but was increased to 55. It is still a strange transaction. Sure, putting the money into pension was a good move. However, then commencing the pension to buy an annuity was a strange one. Even if it was an Immediate vesting personal pension plan.

coyrls

dunstonh wrote: »

It used to be 50 but was increased to 55..

Thanks, I can see now that it was changed in April 2010. As the OP is now 55 she must have just qualified.

jamesd

TinaWillows wrote: »

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?

Until you're no longer receiving means tested benefits.

Linton is right that until 2016 it's not going to be possible to sell an annuity anyway but they have published the consultation and proposed deprivation of assets treatment and that is planned to work as I described.

You should expect a very low value. That's partly because of your health. The shorter the life expectancy, the lower the value of the annuity. If the buyer expects you to live for two years the most they would pay is something like 60% of two years worth of payments.

When it comes to your children, something to consider is that their preference is undoubtedly for you to still be alive so they can enjoy having their mother around. It doesn't take large amounts of their money to dramatically improve your position.

It may not help you much but it's also worth knowing that while many benefit levels are fixed, costs of living vary across the country. If you're in a high cost area it could pay to move to lower cost area.

TinaWillows

Thank you for all your kind & considerate responses


Even though I'm disappointed I can't access my money, I really appreciate the time you've taken to explain that to me, and the self-affirming things you've said about my importance to those in my life .... which I do forget at times.


Thank you so much xx