The Low Incomes Tax Reform Group (LITRG) welcomes the opportunity for everyone with an annuity to be put on an equal footing.
Secondary annuities market
Welcoming the Government’s proposals for the tax framework for the secondary annuities market which is intended to come into force next April, LITRG noted that this should put everyone, both pre- and post-pensions freedoms introduced last year, on an equal footing.
Those wishing to sell back a now-inappropriate annuity either for a lump sum or for conversion to drawdown or a different annuity will come under the same tax treatment as those who for the last 15 months have had the opportunity to take their pension savings in a variety of different ways.
Whilst welcoming the proposals, LITRG suggest there must be no compulsion on those with modest amounts at stake to be forced to pay for expensive independent financial advice before making a decision, since such costs would exclude them from participating in a secondary market. There would also be a need for clear warnings against the activities of scammers, ever ready to part unwary savers from their money.