Annuity cash in

A question about : Annuity cash in

My husband bought an annuity a few years ago that we planned to keep until he was 65. Unfortunately our circumstances have changed and we are looking to cash this in. Is this possible when the pension rules change in April, can we do it ourselves and what percentage would we lose? We were last quoted a value of Ј34k

Best answers:

• You can't "cash in" an annuity. But according to this morning's Telegraph the government is considering changing the law to allow companies to compete to buy out annuities. So keep your eyes on the newspapers.
  This proposed policy, by the way, was forecast in the last few days by a shrewd observer on this very forum.
  P.S. I don't understand "we planned to keep until he was 65." Can you explain?
• We were planning on buying a pension with it. Sorry we're not well up on this kind of thing - thanks for your help
• Thanks for the reply - and I think you're right about being confused with the terminology!! What we did was amalgamated three pensions and bought the annuity which we planned to start drawing of when he was 65 and retired so currently it isn't being drawn on.
• you either haven't bought an annuity (as you would be getting an income), or you are in Drawdown and not taking income?
  You again are not with the lingo.
  REad to us from any documents you have- that could help as we are clueless.
• Thanks everyone - no wonder us mere mortals have no clue when it comes to pensions etc. I will get my paperwork out as requested and get better/ more specific information and ask again
• Thanks for the previous help - I'm not sure if this will be seen but as an update the product is a Fixed Term Annuity with Just Retirement
  I hope this makes the request for help clearer
• Thanks for replying - my main question is can we cash it in in. April or will we have to wait till 2017 when my husband turns 65
  Thanks for your time
• A fixed term annuity pays out for a fixed term. Unless there is a cancellation clause in the contract you can't simply stop it now, instead you have to wait until the end of the term. Your husband's age doesn't matter, what matters is the term of the annuity - when it ends.
  It appears that what you have is the type of capped income drawdown product with fixed term annuity providing the income and an guaranteed capital value in the pension pot at the end of the term. So once the annuity has reached the end of the term you'd have complete flexibility with what to do with that guaranteed maturity amount.
  If at the time you purchased the annuity product you chose to buy the "Plan Protection" option you have additional options besides just waiting, since you can use their "conversion" feature. One catch is that the conversion might give you a lower value than waiting, so it could very seriously harm your finances even if it's available to you.
  So before we can comment much with any real idea of your options we really need to know:
  1. is it the product that I linked to?
  2. when does the term end?
  3. did you by the plan protection feature to give you access to the conversion option?
  4. what type of value was that 34k? Was it an estimated maturity value at the end of the term (seems most likely) or a pension pot value if you used the conversion option?
  5. what changes of circumstances prompt you to want to change. This is because we might find better options that can achieve your goals with lower cost/loss.
  6. It would also be useful to know roughly what the total value of the three pension pots was, what the income level from the term annuity is and what the maturity date is so we can do some checking of our assumptions to make sure that the numbers all seem reasonable.
  It's worth knowing that you have a very unusual product so you'll probably need to point to a description page when asking for assistance, else people can be expected to get the wrong idea, just as happened here. Unusual doesn't mean bad, it's quite an interesting product. Just means that it's a trap for those trying to answer questions until they know just what it is that you have.
• Like jamesd says your options will be dependent on whether the plan includes Plan Protection with a conversion option. If so, you then need to establish whether the conversion option represents good value, and if all things considered it is the right thing to do.
  They are pretty much standard on Fixed Term Annuities now, but tended to be an optional feature a few years ago.
  The product illustration (or quotation) from Just Retirement should have a "Plan Benefits" section or similar, which will have the option "Plan Protection" and details of whether or not it is included in the plan. The suitability report from the adviser who set it up should also explain this option and if it was/wasn't included.
  Any information you can provide from the paperwork will help - someone here should be able to make sense of it even if it means nothing to you