Pensioners will be handed new freedoms to turn their retirement income into cash the Treasury has announced, but it could lead to financial disaster according to several experts. The government said that it will allow around 5 million people to cash in their annuities from April 2017.
It will do so by scrapping tax restrictions on annuities, which currently means those wanting to sell their retirement income face a 55 per cent charge, or even up to 70 per cent in some cases. Explaining the planned change, Pensions Minister Ros Altmann said: “Some people were forced to buy annuities in the past that may not have been suitable for them. This reform will allow more people the opportunity of a more flexible income stream.