As soon as the pension freedoms were originally announced, I started to hear from people who had been ‘forced’ to buy an annuity and who were resentful that they could not also opt for capital over income. I could not see a good reason why, in principle, they should not be afforded the same freedoms as those a few years younger. But at the same time it is clear that there are others – a majority according to the Treasury – for whom this would not be the best option. The challenge is to make sure that those who go down this route have the best possible access to the help they need to make the choice that is right for them.
Steve Webb is director of policy at Royal London and a former pensions minister
Key points
The announcement by the chancellor in his March 2015 Budget that people will be able to sell their annuities for cash has sharply divided opinions.
There needs to be a requirement for annuity buyers to ask if the seller is on benefits.
The secondary market could be one answer to the question of what do to about people with guaranteed annuity rates under the ‘pension freedoms’ regime.
