Pension freedom or trap for the unwary?

(Sep 23, 2016)

An interesting development is the pending right of annuitants to sell their future annuity payments for a cash lump sum, planned for introduction in 2017. The new option will only apply to holders of individual annuity policies with insurers, either from initial purchase of an annuity or because they are holders of individual annuities following a buy-out. The state pension is excluded, as are pensions from a defined-benefit occupational scheme (being covered by a grouped buy-in policy or longevity swap won't change this since these are assets of the pension scheme, not the individual).  There may also be some interesting twists and turns for schemes which have set up their own captive insurer.

This new optionů

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Tags: pension freedom, annuities, selection risk, information asymmetry

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