cashing in an existing annuity

barnaclebill

I heard something on the radio about being able to cash in an existing annuity but that would be in 2017.
I have a small annuity that only pays every quarter that I took 25% of and would rather have the rest in a lump sum if possible.
did I hear correctly and why 2017

Linton

You cant yet. The government is consulting on the possibility of cashing in an annuity and I believe removing the legal restrictions that currently prevent it. However it seems unclear how it would work in practice, who might want to buy a second hand annuity, and whether they would want to pay what you might think is a reasonable price.

dunstonh

You wont be able to cash in an annuity. That is not what is planned. The proposals are for you to be able to sell the annuity to a third party. However, it is unlikely to be suitable for the majority of people.

id I hear correctly and why 2017

It requires the setting up of a whole new regime and decisions need to be made on how it should be regulated and what processes need to be put in place.

i suspect most people that apply for figures will end up not bothering as they are going to be disappointed with the amount offered. Ballpark expectation is that it will be the annuity amount multiplied by life expectancy (based on your current health - not what it was when you purchased it) minus an amount for the cost of administration for the sale and minus quite a bit more for profitability.

So, if you have an annuity of £1000 a year and a life expectancy of say 7 years, then you could be looking at £3000 being offered to you.