The Chancellor George Osborne has outlined changes to pensions that could affect millions. The biggest change are around annuities where rules are set to revolutionise the way pensioners take an income in retirement, scrapping the necessity for most people to buy an annuity. Instead, savers will be free to take their whole pot in one lump sum, or withdraw money from their account when necessary.
Mr Osborne also confirmed plans to allow pensioners to sell their annuities. From April 2016, the government will change the tax rules to allow people who are already receiving income from an annuity to sell that income to a third party, subject to agreement from their annuity provider. The proceeds of the sale could then be taken directly or drawn down over a number of years, and would be taxed at their marginal rate, in the same way as those taking their pension after April 2015.