Why the annuities sell-off won’t work.

12th January 2015

Jonathan Watts-Lay, Director, WEALTH at work, discusses with The Times why many savers would get less than they were hoping for and would also be taxed at their marginal rate.

“Many pensioners would welcome the option to be able to cash in their annuities for a cash lump sum. However, the sting in the tail is what value they are likely to be able to get, and in reality this may not be good,” says Jonathan Watts-Lay, director of WEALTH at work.

“Just look at what happened with endowments. When with-profits endowments are sold on to third parties, the prices offered tend not to be very attractive unless you really want a cash lump sum at any price.”

Jonathan Watts-Lay continues, “A second-hand annuities market is likely to be very similar, if you bought an annuity four years ago it’s unlikely the provider will pay you what you bought it for.”

Please click here to read the full article in The Times.