to create movement of a new "rent aftermarket" is an extension of the originally announced freedoms government pension signal in 2014, and the implementation of April 2015.
Now, the government said the April 6, 2017, in search of budget restrictions for people to sell your annuity, be removed, be retired with an existing income - and everyone who purchases a pension to future - the possibility, cash sale.
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Currently, anyone who wants to sell an annuity to a willing buyer would face a tax burden to 70PC. The government is now released so that only those taxed at the marginal rate (commentators see below).
The measure will be beneficial for those who, for one payment of pension, a lump sum can exchange small or insignificant.
But critics have pointed to numerous risks, and warn that it could waive his right to a guaranteed income a dangerous step.
Tom McPhail, pensions expert at Hargreaves Lansdown warned that "the sale of a guaranteed income is not suitable for many people."
The government estimates that it will receive about 5 million pensioners, a total income of � 13.3 million per year.
Sell ??your pension? How to use
It was the dream of many unhappy buyers were pension: the policy of sale to the insurance company for a lump sum of cash. And now the government wants to make it a reality.
It sounds simple and attractive idea, but there are complexities. How can you be sure it was to get a good price for your pension? And the amount of tax you have to pay? Let's see how such a market would work in practice.
Annuity rates in the last 10 years for buyers 60 (dark blue), 65 (blue) and 70 (green)
On the basis of a single person with � 100,000
Annuity rates in the last 10 years for buyers 60 (dark blue), 65 (blue) and 70 (green)
How can I get my pension if sold in this new market?
the board will continue to exist under the current proposals are then sold on the secondary market. The payment would be reassigned to the new owner and the rent would continue to pay until - not the new owner - is dead.
We can not be sure of the amount of his pension, would be sold in these circumstances. But it is possible that the board would be useful, it would be someone of her age and life expectancy costs the same annual income for the life of the purchase is receiving the policy.
For example, say at the age of 65 to buy your pension now, when he is healthy. Overall, pension companies assume that you live for 20 years until the 85th
Now, suppose you want to sell the pension within five years if you are 70 and still healthy then.
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If the company you buy your annuity to another buyer 70, is sold in good health, it is believed that the buyer's price based what he or she can be calculated at the time of a new board.
However, new buyers would probably prefer a pension, which lasted until his death in his place. Therefore, it is likely to expect a reduction in the pension of "second hand". It could also be expected to have a medical examination to confirm their condition. And the company that runs the transaction expect a cut.
If the value of the second pension hand is on the new basis, focusing on the factors significantly from that annuity rates influence at the time. These include interest on government bonds (gilts). If you, like an annuity is purchased, it means gilding was much cheaper than your pension should take now.
If there was no buyer for my pension, insurance could not buy new easy?
A: This is another possibility. Each bond carries a risk for an insurance company because they do not know when to die and therefore the amount of money you pay in total. If some insurers have taken too much risk, you can reduce it by buying annuities. For the insured, the question is what price is offered. Experts say that insurers want a discount, perhaps 20pc on the real value of the pension.
But what is the real value? It depends on your life expectancy if they want to sell. If your health has deteriorated since you bought the bond, its value will be lower, reflecting the fact that it is likely to pay less time than originally planned.
For this reason, you probably have to undergo a medical examination before you is a value in trade for your pension.
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