Cash In Annuity Offer

Published / Last Updated on 01/12/2017

Pension Annuity AdviceCash 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.

Eligibility:

  • Customers aged between 55 and 85
  • An annuity in payment not exceeding £300 a year
  • The calculated cash equivalent value must not exceed £2,000
  • Pension Annuity Income must have commenced before pension flexible freedoms were introduced in April 2015.

When does it start?

  • Option starts for eligible clients from November 2017
  • Paper based claim form available now
  • Online claim form from January 2018
  • Clients then have six weeks before any cash offer expires

Seek Advice

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.

Comment

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.


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