According to Scottish Equitable, the current rule that pension investors must purchase an annuity by age 75 could be dispensed with by April 2005. The Government has been undertaking a wide-ranging review of the pensions framework within the UK but we are still waiting for the report of changes to be made.
Scottish Equitable's thinking has come about following the Department for Work and Pensions investigations to pensions after the age of 75. When questioned, a press officer for the DWP said that alternative sources of retirement income were being looked into.
Our View
Everyone is waiting for the Government report that reviews the current pension system. The report aims to make changes that simplify the system and this can only be good news. There are a number of issues that could make the new pensions system worse but they will generally affect the wealthy.
Not being forced into an annuity by age 75 could be a good thing, especially if the financial climate is not right. However, after the age of 75 you could be leaving it too late to enjoy any pension income.
We believe that people who do not need their pension income should not have to take it. They should be allowed to pass it to another generation in their family (whether by income or capital), thereby easing the ever-worsening pensions crisis.