Can you cash in an annuity?

cattermole

Sorry if this has been asked before.

I have an annuity that I had to put a small pension pot into a few years back I was under 55 at the time. It only pays £250 per annum.

So can I now cash this annuity in?

PeacefulWaters

Not yet.

Watch this space. There's a proposal.

http://www.bbc.co.uk/news/business-31950364

Spriguns

Judging by that.

I am 58 years old , in 1983 I took out a private pension , then i forgot all about it , I was contacted by the pension company (Phoenix) , and was told my pension was worth £10,000, so I took £2500 straight away , which left £25 ish a month , hardly worth the effort , so I presume I will have to wait under the new government pensions rules in order to withdraw the rest as a lump sum.

Cheers

Spriguns

Good_bad_and_ugly

Sprigins,

Is this any help to you?

http://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

PeacefulWaters

Good_bad_and_ugly wrote: »

Sprigins,

Is this any help to you?

http://www.pensionsadvisoryservice.org.uk/about-pensions/retirement-choices/the-right-choice-for-me/taking-a-small-pension-as-a-cash-lump-sum

I'd be surprised if it was. It seems the annuity is already in payment.

Good_bad_and_ugly

Sprigins has a private pension, I got the impression tax free cash was taken, in which case if he took the pension no more than 3 months before he got the first payment and gets all payments within 12 months of the first payment, it should be ok?

If he takes payments from a pension pot before taking the rest as a lump sum, he pays tax on the whole lump sum so it'll depend on marginal rate too. Is it just the tax free cash taken?

bmm78

Important to stress that the government's proposals (and nothing more at this stage) are that from April 2016 people with existing annuity contracts will be able to sell the income stream to a third party financial institution.

It is not "cashing-in" as such. The existing contract remains intact, with the difference that the payments will go to the buyer of the annuity contract, rather than the individual who took out the annuity.

The sale price will be whatever the company buying the annuity is willing to pay for it. If the annuity is paying very little, it stands to reason that the sale price for that annuity stream won't be much either.

There will also be no compulsion on the annuity provider to permit the "sale" of the annuity. They can block this if they wish, or impose a charge that they consider appropriate.

jem16

Spriguns wrote: »

so I took £2500 straight away , which left £25 ish a month , hardly worth the effort

Can you just confirm please?

You took your 25% tax-free lump sum and are now receiving £25pm?

If that is the case then you have purchased an annuity and no longer have a pension so you cannot do anything at present.

Spriguns

Hi Jem.
Thank you all for your reply's.
And to confirm
I received the 25% (£2500) around 2 years ago , since then i am been receiving approx £25 per month (its over £25 , but under £26...lol ).

So I would have to wait until future government legislation , if any to take the remainder.

Cheers

Spriguns

Good_bad_and_ugly

If you have annuitised and wanted to sell back, the transaction loss premium might be in the region of 20%.