Annuity sale

Words of warning on second-hand annuities

The creation of a second-hand annuity market is guaranteed to happen, according to former pensions minister Steve Webb, who suggested the Treasury has already ‘banked' the cash it expects to receive from the policy.

The second-hand annuity market may fail to develop and even if it does many people will struggle to make well-informed decisions, think thank the Institute for Fiscal Studies (IFS) suggests.

The Financial Conduct Authority (FCA) has made it a requirement for firms to rank their annuity products against their peers and simplify the information they give to consumers in the form of wake-up packs.

The government does not intend to permit those wishing to cash in their annuities to sell them back to their existing provider, it has announced.

The government is considering making regulated financial advice a requirement for people looking to sell their annuity contracts, Budget documents reveal.

Chancellor George Osborne has confirmed retirees will be allowed to sell their annuity contracts for cash from April 2016 without facing "punitive tax charges".

Chancellor George Osborne will further relax pension rules in his Budget on Wednesday to allow the sale of annuity contracts.