However in October 2016, the Government took the decision to completely abandon these plans. The Treasury said it was scrapping the plans because it had become increasingly clear that “creating the conditions to allow a vibrant and competitive market to emerge, with multiple buyers and sellers of annuities, could not be balanced with sufficient consumer protections”.
It added: “Consumer protection is a top priority for the government, and we are not willing to allow a market to develop which could produce poor outcomes for consumers, such as receiving poor value for their annuity income stream and suffering higher costs.”
So sadly you will not be able to sell your annuity for a cash lump sum next April – or any time after that for the foreseeable future.
This will not be of any comfort to customers who really need a lump sum now. In such a case after exploring all other alternatives, and if a customer owns their own home, they may be left with the only option of using Equity Release. This provides customers with an immediate lump sum based on the value of their home. Typically, the amount you receive is limited - it will not be for the full value of your home. Most importantly there are a number of important protections built in for customers. The key guarantees are that you can live in your home for the remainder of your life and that the debt cannot be more than the value of your property at the time of your death. You do not have to repay anything towards the loan during your life. On the death of the last property owner the original loan, plus interest added over the years, is owed to the lender.
In this case it is more than likely that your children will have to sell the house to repay the debt. For this reason, Equity Release is something that should be discussed with the wider family before you take it out.
If you would like more information on Equity Release then please use the link below to visit one of our websites, where more information can be found. You can also produce and print an equity release quote to give yourself an indication of costs and charges and the long term impact of interest.
www.best-uk-equity-release.co.uk
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