Nick Smith MP Labour MP for Blaenau Gwent
BLAENAU Gwent MP Nick Smith has joined calls to give pensioners locked into annuities which provide a paltry monthly ‘income’ the right to access their money as a lump sum.
Mr Smith recently helped Colin Jones from Tredegar, one of the many thousands of pensioners being denied access to their money.
After battling for more than seven years to get access to his money as a lump sum, Mr Jones asked Nick Smith for assistance.
Although the government changed the rules for anyone buying an annuity after 2015, those who retired prior to this date are continuing to be denied access to lump sums of money in favour of small amounts each week.
Mr Jones, 71, was receiving around £2.70 a week from ReAssure when cashing in his annuity would provide a one-off sum of more than £2,400.
When he contacted ReAssure about cashing in his annuity recently he was sent a letter informing him that the firm had refused his request in order to prevent him making “the wrong decision”.
Mr Jones wrote an angry letter back to the company over what he felt was the patronising implication he was unable to manage his own money.
He received an apologetic response which nonetheless reiterated that the firm was “under no contractual or regulatory obligation to offer annuitants the option to surrender their ongoing annuity in return for a one-off cash settlement.”
After Mr Smith contacted the Financial Conduct Authority about this issue, Mr Jones received a call from ReAssure saying they had reviewed his case and would be allowing him access to his money as a lump sum.
He said: “I’m delighted, but was this fight necessary? This could have been resolved years ago.
“It shows that companies are in a position to release people’s money if they wish to.
“There will be plenty of other people in the same position as I was.”
Nick Smith MP also wrote to the Chancellor Phillip Hammond and received a response from the Treasury which stated that “providers are not obliged to offer small pot lump sums” and that “the Government has no plans at present to amend existing legislation.”
Mr Smith said: “The fact that the rules were changed for those who retired after 2015 is an acknowledgement that the system is unfair.
“I am delighted that Mr Jones will be allowed access to his money but it is inherently wrong that people are still being forced to continue receiving tiny sums each month and refused access to their money.
“People who retired prior to 2015 should in this instance be afforded the exact same rights as those who retired after.
“The response I received from the Treasury was not positive so I am now going to raise this issue at future questions to the Chancellor of the Exchequer in Parliament to call for a change to be considered before the next Budget is published on October 29.”