People in retirement will be able to join the pensions freedom party by swapping their annuity for cash. From April 2016, the government will remove the restrictions on buying and selling existing annuities to allow 5m pensioners to sell the income they receive from their annuity without unwinding the original annuity contract.
Pensioners will then have the freedom to use that capital as they want - subject to their marginal rate of tax - just as those who reach retirement with a pension pot can do under the pension freedoms announced in Budget 2014 and coming into play next month.
The big challenge for the Chancellor is to create a fair market for these sales. A consultation has been launched on the measures that are needed to establish a market to sell and buy annuities.