Plans for the second-hand annuities market “should be progressed with caution”
Citizens Advice has today said plans for the second-hand annuities market must protect consumers.
The national charity was responding the Government’s announcement that people will be able to sell their annuity from 6 April 2017.
Gillian Guy, chief executive of Citizens Advice said:
“Plans for the second-hand annuities market should be progressed with caution.
“Extending pension freedoms to people who have already bought an annuity gives consumers greater control over their retirement by allowing them to sell their annuity for a cash sum. It’s important to remember that for many people, selling an annuity might not be in their best interest as they are giving up a guaranteed income for life.
“People may also face potential pitfalls such as paying a hefty tax bill, losing means-tested benefits and having to pay annuity transaction costs for a second time.
“To make sure consumers understand these risks, the Government's commitment to extend Pension Wise to people considering selling their annuity, as well as to affected family members including partners and children is a welcome step. A mandatory advice threshold will need to strike the right balance between protecting consumers without creating barriers which prevent them from exercising their pension freedoms.”
Notes to editors
- The Citizens Advice service comprises a network of local Citizens Advice, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
- The advice provided by the Citizens Advice service is free, independent, confidential and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
- To get advice online or find your local Citizens Advice in England and Wales, visit citizensadvice.org.uk
- You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers.
- Local Citizens Advice in England and Wales advised 2.5 million clients on 6.2 million problems in 2014/15. For full service statistics see our publication Advice trends.
- Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 2,500 service outlets across England and Wales.