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Annuities at 75 to be scrapped

16 July 2010

The Government has launched a pension consultation paving the way to scrap the requirement for individuals to purchase an annuity at age 75. Under the proposed new regime, individuals at retirement would choose between a capped drawdown system, in which withdrawals would be subject to certain annual limits, or a more flexible arrangement giving the individual access to unlimited lump sums, provided minimum income requirements are met.

Financial secretary to the Treasury, Mark Hoban said:
This Government is committed to fostering a new culture of saving and responsibility in the UK. To encourage people to take greater responsibility for their financial future, including in retirement, we need to give people greater flexibilty over how they use the savings they have accumulated. This consultation puts forward reforms that will replace outdated and overly complex pensions tax rules with a new system that gives individuals greater freedom and choice."

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