Retirement
Can you cancel your annuity and get your money back?
Insurers have been reviewing their annuity cancellation terms in light of the Budget reforms. So, if you’re re-thinking your recently-purchased annuity, you may have a way out.
But, according to annuity expert Alan Higham, just because you can doesn’t mean you should.
He said: “In cancelling your annuity purchase to consider other options you may well lose the annuity rate you have been offered. Make doubly sure that you aren’t in the group of roughly 1 in 8 that benefits from guaranteed annuity rates which often are very generous. In rejecting such a rate, you might lose the ability to take it in the future.”
Higham recommends seeking advice before you cancel.
The extentions some providers have added to their cancellation policies should give you the space to think carefully- and seek professional advice- about your next move.
The table below shows the current cancellation periods for various annuity providers:
| Annuity Provider | Usual Cancellation Rights | What’s changed since the Budget |
| Aviva | 30 days from the date the application was signed | Now 30 days from when the policy has been set up instead of when the application was signed |
| Canada Life | 30 days after the policy document issued | No change |
| Hodge Lifetime | 30 days from the date the application was signed | No change |
| Just Retirement | 30 days from the date the client received their right to cancel (issued with application form) | No change |
| Legal & General | 30 days from the date the application was signed | No change |
| LV= | 30 days from the date LV= received the complete application | Extended to 60 days from the date LV= receives the completed application- this is for customers currently within their existing 30 day cancellation period and for new customers who apply for an annuity in the next month |
| MGM Advantage | 30 days after policy document issued | Extended to 60 days after policy document issued |
| Partnership |
30 days after they receive a confirmation letter (posed to the client when Partnership processes the application). |
Extended to 11 April 2014 (if current cancellation rights were beyond 11 April then the standard 30 days still applies) |
| Prudential | 30 days from when they receive their first Prudential quote | No change |
| Standard Life | 30 days after policy document issued | No change |
Table source: Hargreaves Lansdown. Correct as of 21/03/14
