Pensioners are no longer expected to buy a rip off annuity on retirement. You may still want to buy one, to provide a more certain level of income in retirement, but you’re no longer forced to.
Hopefully pensioners in the UK will soon be able to sell existing annuities in a secondary market. Buyers of annuities and brokers will have to be authorised by the Financial Conduct Authority FCA. Around 300,000 UK pensioners will soon be able to sell their annuity if they want to, without being heavily punished with selling fees. The new secondary market will make cashing in an annuity potentially more financially viable, as opposed to the present position of financial suicide!
However, just because you will soon be able to easily sell your annuity – should you?
Check out the broker selling fees. Buyers of annuities will be big financial institutions who will instead get the annuity payments when they buy an annuity off a pensioner, and will pay the pensioner to buy the annuity off them. An annuity is paid until you die, so a quick annuity may not be the best idea for a pensioner.
Caution before selling an annuity is recommended. Make sure you weigh the benefits, costs and other negatives before making the big step of selling an annuity. Shop around for the best deal from annuity buyers when they are able to buy your annuity.