Sell My Annuity Some Final Salary Schemes Included

Sell My Annuity Some Final Salary Schemes Included.

HMRC yesterday published its consultation paper regarding your ability to sell your pension annuity already in payment for a lump sum.

The Government estimates that 300,000 people of the 5 million or so pension annuities in payment will convert to lump sum.

In addition, in a welcome, yet surprising addition, some defined benefit scheme annuities will also be included.  The papers says: “The new tax rules will permit individuals to assign or surrender annuities payable to them that were purchased in respect of money purchase or defined benefit arrangements.”

Most defined benefit pensions will not be able to convert to lump sum but those defined benefit pensions where the scheme trustees have ‘out sourced’ the pension payment known as a ‘buy out’ where the scheme trustees buy an annuity with another pension annuity company.  It is proposed that these schemes should be allowed to assign the beneficial ownership to you, the pension member, and then you will be able to sell it for a lump sum if you wish.

Comment

We welcome the proposed flexibility with defined benefit schemes but suggest that those already locked into normal defined benefit pension annuities such as single people and widows/ers should be considered as being allowed to opt out and sell their annuity.