Nigel Green, the founder and chief executive of deVere Group, one of the world’s largest independent financial advisory organisations, comments on Chancellor George Osborne’s 2015 Budget.
The sale of annuities in exchange for cash lump sums
Mr Green notes: “This is a pre-election move aimed at appealing directly to those who are already retired – and who are, coincidentally, the demographic most likely to vote, and to vote Conservative.
“Whilst the new flexibilities will certainly appeal to many, I believe that many more retirees will remain with their annuities, perhaps unconvinced by the idea or not being aware of the other ways to secure an income retirement.”
He continues: “There are also real concerns that individuals will be charged excessively high fees to cash-in their annuity and can expect poor value in return for them. I would urge anyone considering selling their annuity contract to seek professional independent financial advice in the first instance.”
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He adds: “I suspect that the pension liberation scammers currently targeting individuals to cash in their pension pots in response to the new pension freedoms coming into effect on 6th April, will now do the same with the recently announced annuity freedoms.
“These Wolf of Wall Street-esque scam artists will inevitably increase their activities yet further – they will see it as ‘boom time’. We know that the scammers are adapting their tactics to reflect the changing pension’s landscape.
“I would urge anyone who is contacted to sell their annuity contract to be extra cautious, not to be rushed into making a decision they might regret, and to seek professional independent financial advice before proceeding.”
Lifetime allowance cut to £1m
In an earlier statement, available here, Mr Green describes this measure as a “dangerous cap on aspiration”, “scandalously counter-productive,” “a slap in the face for those who have worked hard and saved hard,” and a possible “precursor to a fully-fledged wealth tax.”
He also added it would “serve as a catalyst for people to move their British pensions out of the UK.”