George Osborne has today said that he’ll allow people to sell their annuities for cash, and will consult on how best to establish a market for second-hand annuities. This move will be popular with many of the five million or more who have been forced to buy these annuities in recent years.
Here’s what you need to know.
1. Annuities have become worse value but people still forced to buy as there was no other way for many to take money out of their pension funds. The rules required anyone who wanted to withdraw some cash from their pension savings to ‘secure an income’ and if they did not have very large amounts in their fund, they had no other option – they had to buy an annuity. When interest rates crashed, so did the annuity payout. This has hit pensioners hard.
2.
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