The government has announced that more than five million people will be able to sell their annuity from 6 April 2017, the administration will also extend its landmark pension freedoms and create a new secondary annuity market.
From the 6th of April 2017 tax restrictions for people looking to sell their annuity will be removed, giving five million people with an existing annuity, and anyone who purchases an annuity in the future, the freedom to sell their right to future income streams for an upfront cash sum.
“For most people, sticking with an annuity is the right thing to do. But there will be some who would welcome being able to draw on that money as they choose – the same freedom we gave people approaching retirement in April this year,” commented Economic Secretary to the Treasury Harriett Baldwin.
These changes will give people the freedom to use that capital as they want, just as those who reach retirement with a pension pot can do under the pension freedoms introduced in April. Under the new changes retirees will be able to take the annuity as a lump sum, or place it into drawdown to use the proceeds more gradually.
The government also announced that pension annuities belonging to an individual and held in their own name will be eligible for the new freedoms.
“People who’ve worked hard and saved hard all their lives should be trusted to make the right decision for them and with the help of the regulator we will ensure these people have the right information to do that,” commented Economic Secretary to the Treasury Harriett Baldwin.