People over 75 in Asps miss out on rule change
People over 75 who are already in alternatively secured pensions will not benefit from the Budget interim change to push compulsory annuitisation back to 77 or the permanent reforms which come into effect next April.
The Government scrapped compulsory annuitisation at 75 from the day of the emergency Budget. While it is developing new rules, it has allowed people who reached 75 on June 22 or after to hold off buying an annuity for another two years while continuing to face taxes of 35 per cent on death instead of the 82 per cent previously applicable.
But people who were already 75 on Budget day and had chosen already to defer buying an annuity will not benefit from the new arrangement.
A Treasury spokeswoman says: “These people will not benefit from any extra flexibility because they had already made the decision to defer annuity purchase based on a tax charge of 82 per cent. Nothing changes for them.”
AJ Bell marketing director Billy MacKay says: “I understand the Government’s stance but it is still unfair that people in this position simply because of their age will be penalised when if they were two years younger they would have benefited.”