Phoenix leads the way

DON’T let any insurer tell you it’s impossible to cash in your annuity.

Thanks to Phoenix Life, now we have indisputable proof that it can be done at any time. What a terrific example it has set for its rivals in offering 20,000 customers the chance to exchange tiny incomes for a lump sum of up to £2,000.

Other annuity giants have dragged their feet since we revealed in May that some firms were considering ways to help the five million retired savers who were denied the pension freedoms available to everyone else.

Now there’s no excuse for blocking customers from cashing in piddling annuities worth less than £300 a year. Phoenix has shown it’s a win-win for both savers and firms because it slashes admin costs.

The £300 figure is important. At £25 a month, this income barely pays for a cinema outing, let alone a gas bill. For most people, these measly payments derive from a few pounds stashed away in a forgotten company pension. Savers are hardly sacrificing a lot if they give up this income stream. I’ll be writing to the bosses of every insurance firm to ask them when they intend to follow Phoenix’s lead.

Intriguingly, the small pension pot law Phoenix is using to make payouts actually allows customers to cash in up to £10,000.

Based on its calculations, that’s comparable to an income of £1,500 a year — which is still fairly trivial in the grand scheme of things.

Phoenix chose to restrict its offer to those getting less than £300 a year for its own safety reasons.

If its trial is successful, other firms should have the confidence to increase their limits to £1,500. The reason all this is taking so long is that insurers are petrified of facing mis-selling claims if they allow savers to cash in larger funds without full financial advice.

They fear someone will give up a guaranteed lifetime income to squander the cash on dodgy investments, holidays and fast cars and have nothing to see them through their final years — then claim that the company betrayed them.

This is where we need help from the authorities. Privately, insurers tell me they will play ball if they’re given a set of guidelines on how to treat savers who want to cash in larger annuities.

This could include instructions on what to put in offer letters, how to ensure fair payouts and what firms can and can’t say to customers over the phone. It could also include a requirement for savers with pots above a certain size — say, £10,000 — to take independent financial advice.

My sources say the sticking point is that the City regulator won’t write these rules unless the Government asks it to — and ministers keep saying they’re too busy with Brexit.

It’s an exasperating hurdle, but you can be sure Money Mail won’t rest until justice is done.

Ditch the stamp

STAMP duty is an unjustifiable tax, and it’s quite right that Philip Hammond ditched it for most firsttime homebuyers in the Budget.

Now he must go further and scrap it for everyone. It wasn’t until Tony Blair got into power in 1997 that stamp duty rates became so unreasonably high.

Back then, it was 1 pc on properties worth more than £60,000. Today, you can end up paying 12 pc. Every greedy Chancellor since has become addicted to the £12.8 billion annual revenue stamp duty generates for the Treasury.

But Mr Hammond should realise it’s nothing more than a trumped up version of VAT and is hammering families who want to move up the ladder and pensioners who want to move down it. No wonder the property market’s in a rut.

Savings slump

THE death of the savings habit in Britain is desperately bad news.

Killed off by years of record-low interest rates and stagnant wage growth, entire generations are growing up without putting aside money for a rainy day.

With debt levels soaring and the cost of living rising, it’s vital that families rediscover the prudence that became ingrained in the national psyche during the War.

A word in the ear of younger relatives this Christmas could help them avoid financial catastrophe.