Budget 2015 – Flexibility in retirement

When the new pension freedom was announced in last year’s budget, the Chancellor made it clear that people who had already purchased an annuity had effectively missed the boat.

However in today’s budget, legislation is promised from April 2016 which will allow people who are already receiving income from an annuity to assign that income to a third party in return for a lump sum.

Whilst this will extend pension flexibility to a wider group of people, it will not undo the ‘damage’ suffered by a pensioner who was obliged to buy a product when the annuity rates were low. The low level of income they are assigning is unlikely to bring them a large lump sum and as always there will be significant fees to pay and possible tax implications.

If you would like more information on this topic, please contact a member of the tax team at your local office – we would be delighted to advise you.