Can I change my mind about my annuity?
First published 06 June 2014 • Updated 13 March 2018
There have been plenty of pension changes lately, including how we access our money as we arrive at retirement. So what are your options if you’ve already bought an annuity?
“I am 60 years old and took my pension early in January this year. I had a pension fund that was worth about £50,000 when I retired. I took my 25 per cent tax free cash but then bought an annuity with the rest. I didn’t get a great annuity rate but decided that was probably the best route for me. Now I find that the Chancellor is letting people take out their entire fund and do what they want with it. Is it too late for me to change my arrangements?”
The changes the Chancellor announced were a surprise to the whole industry and have certainly changed much of the advice we are giving clients about how they structure their retirement income. For some clients we are advising that they wait until after April 2015 before taking their pension pot, to give them maximum flexibility – although this is not always suitable, particularly if they have a pension fund that offers guaranteed annuity rates.
But I’m afraid there is no chance of unpicking your annuity arrangement at this stage. Those who had opted for the annuity route in the 30 days prior to the Budget – i.e. were in the standard “cooling off” period – were able to change their minds but other than that, if you’ve signed up to a contract with an annuity provider, then you are stuck with it, I’m afraid.
The only comfort I can offer is that an annuity is normally for life and you therefore have a secure source of income, whatever happens in the market in the future. Given the turbulence of recent years, that’s not such a bad thing!
Make sure you make the right decisions for your retirement by speaking to an independent financial adviser (IFA).
About the author
Carl Lamb Founder and Managing Director of Almary Green Investments Ltd, Carl is passionate about delivering a quality service to clients.
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