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Citizens Advice: Don’t force advice on people selling annuities


People selling their annuities should not be forced to take advice, Citizens Advice says.

The organisation – which is delivering the face-to-face Pension Wise appointments – also says the Government-backed guidance service should have its remit extended to include discussions about the secondary annuities market.

This week, Money Marketing revealed how providers are torn between offering customers access to the new pension freedoms, and protecting them through insisting on advice.

In its response to the Treasury’s consultation on creating a secondary annuities market, Citizens Advice says: “Pension Wise can inform consumers about the key risk free of charge.

“We propose that those with annuities worth more than £30,000 (or a monthly equivalent) should have a firm requirement to take either advice or guidance.”

The Government originally said people on means-tested benefits should be barred from selling their annuity.

But Citizens Advice says: “We don’t believe it is right to exclude more than 700,000 annuity holders from freedoms available to all other over 55s. In fact, these people may benefit most from the proposed freedoms.”

It also suggests the Government reach an agreement with annuity providers to ensure they “all consent to assignment” and that “the cost of doing so will either be accepted as a cost of doing business or will be reflected in a modest standard or capped charge”.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Roger Lawrence 18th June 2015 at 2:23 pm

    In our response to the consultation, we made the same point – signpost advice at every opportunity, but no compulsion. We also said that if there should be an advice threshhold, then it needs to be in terms of a measurable at outset and not at the end of the process. That might be an annuity of £5000pa or more, which you know before entering the process, not a sale value of say £30K which you only know for definite at the end of the process.

  2. Had an annuity, cashed it in, spent the money, now have none, not your fault, phone 0845………. or visit http://www.cashin your

    Ye Gods

  3. So someone cashes in their annuity worth say £20,000. Suffers a tax charge of £4,000, or more depending on whether the systems are in place so that they don’t get put on an emergency tax coding, possibly have to do a self assessment return to get back overpaid tax, and as they have £16,000 in the bank account lose benefits.

    I can see the cries of anguish in the press but people like the CA will wipe their hands saying that they didn’t actually give advice so cant be held accountable.

  4. So the CAB recons it’s up to the job. Well that would be advice wouldn’t it? Unless one has a terminal illness and is going to definitely die within a year or two I just cannot envisage a good reason for trashing an annuity that pays (say)n over £2,500 per annum.

    Anyway from the consultations it looks as if the only purchasers will be regulated corporate entities (larger insurance companies) and since when did they offer brilliant deals?

    What I find so unbelievable is that it has been mooted (by this daft Government) that people on means tested benefits should be barred from cashing their annuities. So what happens when the annuity is sold, the money frittered and the ex-annuitant goes onto means tested benefits?

    Franz Kafka eat your heart out!

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