The regulations regarding taking income as an annuity in retirement are forcing some life companies in the United Kingdom to investigate products that are available in the United States. Winterthur is hoping to bring a new range of tax wrappers to the market in the United Kingdom by the end of the year.
One of these products will be a variation of the Axa product, the Accumulator, which is available in the United States. The Accumulator will allow investors to draw down income, whilst still guaranteeing the capital value.
At the moment in the United Kingdom we are required to take out an annuity or arrange an Alternatively Secured Pension at the age of 75.
Our view
The Government went some way to tackle this issue with Pension Simplification which started in April 2006 and then very swiftly did huge ‘u-turns’ to make pension income options just as unattractive as they were.
This has turned both public and adviser further away from traditional pensions savings as the Government cannot be trusted to keep the law the same and allow stable retirement planning. We do hope the Government will revisit this crucial area.
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