New annuity freedoms present new risks, warns Workplace Solutions
Following Chancellor George Osborne’s Budget yesterday, the last before the UK’s general election, it is essential that retirees are aware of the implications of new annuity freedoms due to come into effect in April next year.
These warnings are being led from Andy Thompson, Head of Sales at Workplace Solutions, which recently launched its dedicated Annuities division.
This latest pre-election announcement by the Chancellor will allow some five million pensioners to encash their annuities, or move them if they wish, in the quest for more lucrative returns.
But, as Andy warns, there is the threat of individuals being charged outrageous fees to cash in their annuity, in exchange for a poor value in return.
In addition, there are risks of mis-selling scams to bear in mind.
It is, therefore, vital that before making any hasty decisions, individuals look into every option available to them with an independent financial adviser, so they are fully aware of these new changes and the bearing they could have on their retirement plans.
Andy Thompson comments: “With the new freedoms come risks. Pensioners, for instance, may not get good value based on age or state of health, plus there is an enormous potential for mis-selling.
“The liberation of five million pensioners locked into lifetime annuities will mean there will be scammers ready to swoop. Caution is essential.”
Workplace Solutions provides expert advice to current and former employees of corporations to enable them to reach, even exceed, their financial planning and retirement objectives.
This has been further enhanced by the launch of the dedicated Annuities Desk.