Big news in budget. No need for annuities !!

Word has it that the chancellor is going to announce further pension reforms in this weeks budget.
The rumour is he is to allow up to five million existing pensioners to swap their fixed annual payments for cash.

http://www.bbc.co.uk/news/uk-31892518

Re: Big news in budget. No need for annuities !!

I heard that Brian but I think with interest rates so low we're better off with the annuity we've got. I suppose it depends how long ago you took your annuity and also if you could do with the cash to pay bills.

I also wonder if it will be taxed or have we already paid tax when we first took out the annuity.

Re: Big news in budget. No need for annuities !!

val - I suppose it boils down to how much you have left in the pot.
No doubt it will be great news for a lot of people though. Particularly those who only recently retired.

Re: Big news in budget. No need for annuities !!

I only have one small occupational pension annuity that gives me about £100 per month at the moment as my other pension is a Final Salary one so I feel that as I'm not receiving my State Pension until September 2016 I'm better off hanging onto that annuity Brian.

Incidentally I found that it's possible to get a forecast on your State Pension again but all I found was the pension only, without any of the other elements that make up your State Pension total, like SERPS / SP2.

As I already have recent information from an enquiry last October I worked out roughly that my State Pension is on course to be around £164 per week, which was the independent forecast that I got a number of years ago when my small occupational pension was drawn.

That will mean that our combined income will be only just over £105 less than it is at the moment but I am still paying Tax and National Insurance of about the same amount at the moment so the difference will shrink a little. stevmk2

Re: Big news in budget. No need for annuities !!

You could always cash in your annuity think the first 25% was tax free(could be wrong on that)

If you have a private pension you have had tax breaks on your contributions, in the past the Gov has clawed this back if you cashed in all your pension.

If you do take a lump sum then I think your are an Idiot unless you have a terminal illness that will kill you within a year after retirment

Re: Big news in budget. No need for annuities !!

I believe that final salary schemes are not affected by any of these changes.
My daughter who works for an insurance company, suggsted that she could get a me good annuity rate, but even if I could change it, the best rate around would only give about £5k-£6k a year less than my defined benefits scheme.

I should get my state pension this year. I tried to get a forecast on-line, but the site kept hanging or timing out, so no luck there. However I should have enough years for a full basic pension under the old scheme. No SP2 as I was contracted out.

Re: Big news in budget. No need for annuities !!

You need to consider you have to have a pension pot of around £50,000 to get an annuity of £3000 pa.

Do you a) take the annuity or b) take the lot, and spend/ re-invest?

Some good advice here:
http://www.thisismoney.co.uk/money/p...nsion-pot.html

Re: Big news in budget. No need for annuities !!

I can see this being the next mis-selling fiasco. I can already hear the brokers sharpening up their knives to pare the pensioners pots away with their fees and even worse scam it away with some sleazy schemes.

Re: Big news in budget. No need for annuities !!

I was contracted out with my Final Salary Pension but when I asked for advice from our own Pension Fund they advised me that they thought I would be better off staying in so I reversed it in about 1992.

As I didn't have a clue at that time I followed the advice I was given.

When I was made redundant from that job I joined another Pension through my new job but I stayed Contracted in, again after someone advised me that it was best for me.

I was made redundant again about 7 years later then again 3 years after that and again in 2010, six times in all!

I'd started full-time work @ 16 but I had been working since I was 14 so when I started full-time work I carried on with my other little jobs because I could fit it all in and I did it all legally - so I paid-in to the system.

I went by what I was told every time but in 2010 I was told that for me at least it had been the right thing to do and my SP2 now is not far off 42% of my he value of my forecasted State Pension per week - and I am still paying National Insurance, although I doubt it would make that much difference in the next 18 months.

OK we won't be exactly well-off and the penny-counting will continue but we will be alright despite all the rotten luck we've had! stevmk2

Re: Big news in budget. No need for annuities !!

I'm anxiously waiting to hear what tax will be taken off my larger occy pension to accommodate the State Pension, payable in less than 3 weeks. Should I hear soon?