Answering Your Question: Can You Sell Your Pension?

Yes, for the first time, you will now be able to sell your pension and get cash in return. The best part here being you do not need to sell the entire pension. You can even sell a part of it and get cash settlement in return. While you get a lump sum amount on the spot by selling a portion of the pension, you can also enjoy some rewards on the remaining pension. However, you can also choose to sell the entire pension instead of receiving payments month on month from a savings bucket.

While there are still many people in doubt asking can you sell your pension, let us tell you that has its own advantages as the government claims that it will make life convenient for people. They will now be able use their retirement savings just the way they want and are not bound to purchase the pension schemes any more. This new scheme of pension freedom by the government which will be effective from April 2017 is offered to those who already possess an annuity and will be allowed to use their pension plans in their own way. Although, they say that everyone can sell their pensions, this flexibility is not available for those who possess public sector pension plans or with final salary.

If you are wondering can you sell your pension without any cost involved, then the answer is NO. In fact there is a high probability that there will be some added costs for certain activities like, costs associated with health checkups, admin expenses for the actual seller, and costs for counseling. Also, whoever is the buyer, he/she will gauge your annuity value based on two aspects, how much you earn and what is your life expectancy? It’s important to note here that the actual pension bucket is not used for the calculation that was used to purchase your annuity and hence, you do not necessarily have a chance to get a better deal with your actual annuity this time round.

Moreover, even when you are ill it does not mean that you will get a better deal on your annuity as the buyer usually asks you to get a medical check-up done to find out your life expectancy. If your health declines from the time you purchased your pension plan, it means that you have higher chances of getting a lower amount, however, the buyer will continue to earn for the rest of his life span. Also, if you are planning to sell off your annuity in your late 80s, again it would be on the buyer’s discretion on how long he thinks you will live and based on that you are it’s not much likely that you will receive a good amount.

So, answering your question can you sell your pension, yes you can, however you must consult a financial advisor irrespective. The government on the other hand, is trying to ensure that they avert any frauds, scams and offer you the best value of your hard earned money.

Leave a Reply