Legal & General has announced that it has withdrawn from the smaller purchase end of the pensions annuity market. They will no longer accept pension funds to buy your income in retirement (an annuity) if they are smaller than £5,000. This leaves only Standard Life who will accept them.
Our view
It no doubt costs L&G and any other pensions company hundreds of pounds to establish a pension annuity and pay the income out. Setting a limit is sensible. It will however, restrict choice with people being forced to stay with their existing pension company and not be able to shop around. On the positive side, it may encourage more people to seek cash alternatives on the grounds of triviality and the Inland Revenue to improve the position on this.