Autumn Statement Tax Free Annuity Spouse on Death

Autumn Statement and the changes to annuity to be paid tax free to a spouse on death before age 75.

Transcript:

“Hello there. So December 3rd and its autumn statement day, pre-budget report day.  The Chancellor has just finished his pre-budget speech about an hour ago and I've been analysing everything, going crazy and the subject this video, my series of autumn statement videos is: gosh I’ve gone through so many, what is it this time? Let me have a look.  Annuity rates, annuity rates on death.  Quite a nice one this, but I think it was expected.

So what was announced in the Chancellor's speech was if you have a joint life annuity so instead of going down the flexible drawdown route these new, accessible routes for your pension at retirement, if you decide to go for the more cautious guaranteed income route of buying an annuity for a guaranteed income for life provided you have a spouses benefit built-in for your husband, your wife, your civil partner; if you die prematurely that income, that spousal income, can continue to be paid to your spouse but not be subject to income tax if you’ve died before the age of 75.

Now I think that's quite good, I think that's now provided a good balance where the Chancellor announced probably about four or five weeks ago now, that for drawdown policies if you die before the age of 75, your loved ones can inherit your pension fund tax free, not after 75 but just if you die before 75.  [And] now he has balanced it with annuities for your spouse on your death if you go for a joint life annuity and again you die prematurely before the age of 75.  They then can continue to receive annuity income and it not be subject to income tax.

So thumbs up that one.  I think that's balanced retirement savings and actually think it will be a ‘sharp intake of breath’, a relief for the leading annuity companies, pension companies where they suffered upwards of 40/50/60% falls in business because people have decided not to use annuities.  And I think that's quite shrewd move from the Chancellor to encourage people to go back again and have a look at annuities where people are married or in civil partnerships.  Thanks very much for watching.”