The Low Income Tax Reform Group (LITRG) was established in 1998 to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes. The LITRG has recently published a new press release on the government’s plan to introduce a new secondary annuity market by April 2017.

The introduction of a secondary annuity market will affect more than five million people who own an annuity as well as anyone who purchases an annuity in the future. These proposals will extend the pension freedoms introduced last year and will be especially relevant for those who retired before April 2015 and had little choice but to purchase a pensions annuity product. Whilst the LITRG supports the freedoms, it is anxious at suggestions that it should be obligatory to get financial advice before accessing the secondary annuity market.

Anthony Thomas, LITRG Chairman, said

'We strongly urge the Government to consult carefully on what sort of advice is most suitable for those with small annuities, to prevent large numbers on low incomes being unfairly excluded from the secondary annuities market. Some form of exclusion from obligatory financial advice for small pension sums should be looked at. There should be provision in the proposed new public financial guidance service for free advice on how to shop around for the best deal and also for clear warnings on the predatory activities of scammers, ever alert to separating the unwary from their money.'

It is not intended that the new tax rules will override any other contractual, legislative or other legal restrictions that prevent individuals from assigning or surrendering annuities that are not in their name.