Turn your pension pot into cash
– Existing pensioners will be able to sell their pension pots for a lump sum
– Treasury says people should be trusted with their own hard-saved money
– Experts warn against rushing to cash-in on annuities using new rights
Five million people will be able to turn their pension pots into a a cash lump sum from April 2017, the government announced today. Instead of receiving monthly payments from a savings pot, existing pensioners will be able to sell their annuity to get their hands on all the money at once.
Ministers said people who had saved for their retirement should be ‘trusted to make the right decision for them’.
Chancellor George Osborne has promised to make it easier for people to use their retirement funds how they like, instead of being forced to buy pension plans. Annuities have been the focus of growing controversy in recent years amid plunging rates, and fears that many people are unaware that they could possibly get a better deal by shopping around rather than sticking with their existing pension provider. Removing the restrictions on buying and selling existing annuities will allow pensioners to sell the income they receive from their policy without unwinding the original contract.
They will be free to either take the cash as a lump sum or place it into drawdown to use the proceeds more gradually. New retirees have already been given the right to access their pension pots instead of being forced to buy an annuity. Today the Treasury confirmed details of allowing existing pensioners to also access their savings.
Read more on this article: Daily Mail