Second-Hand Annuity Market – Coming Soon!

In January 22, 2016
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Retirement

Because of the change in Pension’s legislation, it has become obvious that there is a need for a second-hand market for Pension Annuities. As people have been given more freedom with their Pensions, they now want this to apply to one of the most inflexible of pension options, and why not?

It has been announced that a fully operational second-hand market system will come into place on 6th April 2017. This will give those who take income from an existing Annuity the chance to sell it for a lump sum or to place it into Drawdown. At present, if you wish to sell your Annuity you face a tax charge ranging from 55% to 70%. However, in 2017 you will be charged only at your marginal rate.

Whilst keeping an existing Annuity will be the best course of action for many people, for some it will allow a greater freedom of choice to move away from a system they may find restrictive and unsuitable.

We can never be sure that these proposals will eventually become reality, especially with the amount of Pension reform we have seen recently. However, if the second-hand market is indeed introduced, it is almost certain that advice will be mandatory before any changes can be made – so it is important to seek professional advice when the time comes.

Disclaimer

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The opinions contained within this blog, do not constitute financial advice and no action should be taken based on this content alone.

Jasmine has been a qualified Financial Planner since 2008. She has also been a member of the Society of Will Writers since 2012. She is passionate about helping Clients build their wealth and achieve the financial lifestyle they desire. Her areas of expertise are that of Savings, Investments, Pensions and Retirement Planning.

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Redwood Financial Family Wealth & Estate Planners Ltd is Directly Authorised and regulated by the Financial Conduct Authority. FRN number 774469.

Disclaimers

The Financial Conduct Authority do not regulate, Will Writing, Buy to Let Mortgages, Auto-Enrolment, Tax Advice and Estate Planning. Your capital is at risk. Investments can fluctuate in value and investors may not get the amount back they invest. The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. https://register.fca.org.uk/

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