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Second hand annuities – are they a good deal?
24th June 2015
The Government has recently begun consulting on how existing annuity policyholders could exchange their contract for a cash lump sum. Jonathan Watts-Lay, Director, WEALTH at work – a leading provider of financial education, guidance and advice in the workplace, discusses the topic with Moneywise in an article titled, ‘Will you sell your annuity in 2016?’
Watts-Lay comments, “On an economic level, it wouldn’t be in anyone’s interest to do this. But on an emotional level, you can see why they might be tempted.”
He continues, “Take somebody who bought a standard annuity worth £30,000 two years ago. Let’s say someone offered them £15,000 in return for that income – from an economic point of view it’s not a great deal but you can see how they might think that £15,000 in their hand today would seem to be worth more to them.”
“There has to be volume in the market for it to work – you need the aggregation,” adds Watts-Lay.
To read the full article in Moneywise, please click here.
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