Question:
Can a retirement annuity be cashed in prematurely due to ill-health?
Answer:
Mark, The premise of cashing in your RA due to ill-health is a) that you can no longer work due to your ill-health and b) you need money to replace your work-place income. At age 69, you are not expected to work and you are expected to live off your retirement savings, so in your case the premise that would make your idea work is missing. As you will be aware, you can cash your RA after age 55, get one-third as a lump sum and use the other two thirds to buy a regular income. In nay event, cashing in your RA on the grounds of ill-health is subject to the Trustees's discretion, after considering the facts and documentary evidence, and it seems unlikely they would accede to your request. If you require this money for medical reasons, there are ways to accelerate the pay-out of your annuity, either by buying a living annuity and drawing down at the maximum rate (17.5% pa), or by trying to buy an enhanced annuity (this has to be approved by the insurance company).
