Emergency budget brings greater range of options

The announcement in George Osborne’s emergency budget that compulsory annuity purchases before the age of 75 are to be scrapped has effectively presented retirees with a wider range of choices, say industry sources. While this is certainly an encouraging development, it means that independent financial advice is as important as ever to ensure that retirees can get the deal that best suits them.

According to www.fairinvestment.co.uk, pensions is being given the biggest shake up in 20 years.

At the moment pensioners have to buy an annuity by the age of 75 but the Chancellor announced that this will be scrapped immediately. In the meantime pensioners have until they reach 77 but by next April the rule will be abandoned entirely, giving pension savers more investment options.

Mark Stopard, Head of Marketing at Sun Life Financial of Canada said: “In my opinion, the scrapping of compulsory annuitisation at age 75 is long overdue. My hope is that when the Government comes to develop permanent rules next April, they look at better ways of balancing the Treasury’s needs and allow people the flexibility they need rather than simply pushing the retirement age back to another arbitrary age.”

Nick Scarrett, Fair Investment’s Head of Pensions and Investments has praised the move: “Instead of being forced to buy an annuity at 75 and having to take the rates available at that time, pensioners are being given the choice of when and even if they want to buy an annuity with their pension fund. “I think it is a very positive move; not only will it mean that people have more choice, but hopefully it should go some way to encouraging people to save into a pension scheme.”

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Read the full article: Emergency Budget: Pensions get biggest shake up for 20 years.