Cash In Annuity Offer.
Phoenix Life has announced that any pensioners between the age 55 and 85 and have small pension annuities that are in payment will be offered the option of cashing them in for a lump sum.
Phoenix Group is the UK’s largest specialist consolidator of closed life funds and is making this offer under existing ‘Small Pot’ legislation.
When does it start?
As ever, in this case you would be giving up a guaranteed income for life for a lump sum that is subject to income tax if you are a tax payer. This is a gamble on life expectancy, future annuity payment increases (if you have them), investment performance and inflation.
It make sense for any pension company to look to cut its administration burden on paying thousands of small monthly amounts out in pensions to a one off payment. We will no doubt see many other pension providers launch similar services.
The government will be quite happy too with an immediate boost to income tax revenues, as people will have been paid a taxable lump sum, rather than waiting for small amounts of tax to drip feed in over many years or indeed virtually no tax paid if you have small pensions anyway.