Government to reform pension annuities


The government has launched a consultation period to consider the removal of the requirement to annuitise at the age of 75. In his Emergency Budget speech last month, Chancellor George Osborne already suggested the possibility of increasing the age at which people looking to retire must purchase their annuity from 75 to 77. Though some of suggested that the consultation period may result in the compulsory purchase age being removed altogether.

Some have criticised the plans to reform pension annuities as another concession to the wealthy, as richer pensioners can avoid inheritance tax more easily; TUC General Secretary Brendan Barber saying:

"Too many super-rich take advantage of the huge tax relief on pensions and shovel away more than they need to into their pension pots when they are working. Now they want to be able to take it back out of their pension when they have died and instead pass it on to others. It's not much more than a demand to introduce hereditary rights to tax avoidance ."

However, the move is generally welcomed by most as allowing pension savers more flexibility and freedom over how they use their money, and helping them avoid the problems of declining annuity rates.

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 flexibility over how they use the savings they have accumulated."

If you live in Northern Ireland and require advice in respect of inheritance tax, estate planning or any other legal matter, contact Wilson Nesbitt solicitors in Belfast by emailing estates@wilson-nesbitt.com .



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