The Government will today unveil its detailed plans to reform the requirements that currently force people to buy an annuity with their pension fund by age 75. Dr Ros Altmann, Director General of Saga, and the country’s leading expert on annuities, says:
“Unfortunately, it looks as if the reforms announced today will not benefit most people, they will be focussed only on the wealthiest pension savers. Reform of annuities is long overdue; annuities have become more and more expensive in the past few years, with annuity rates hitting their highest ever level this year.
"When people buy an annuity they give away their pension savings and receive a guaranteed level income for the rest of their life. Once they have bought the annuity they can never change it, which means it is vital to be sure you do the right thing. Unfortunately, most people do not understand even the basics and I believe the Government should allow more freedom for everyone buying an annuity, not just the very wealthiest.
“Government is worried about people spending all their pension savings early on in retirement and then falling back on the State. The way to solve that potential problem is to properly reform the state pension system, so there is no longer mass means-testing and people just get a basic minimum income from the State Pension. Then everyone would be free to use their pension savings in the way they choose. At the very least, we need a radical overhaul of the regulation of annuity selling, so that it works more in the customers' interest."
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For further information please contact the Saga Press Office on 01303 771529.