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&#39Public want annuity reform and a gradual retirement&#39

The Government should introduce gradual retirement, equal-ised tax incentives and moneyback annuities as they all have strong public support, says Downing Street pension adviser Dr Ros Altmann.

But the public would reject using a flexible retirement policy as a cover for raising the state pension age to 70, according to extensive research by pollster YouGov conducted for Altmann, with 63 per cent rejecting moving the retirement age back five years even if it was sweetened with a big increase in the amount of the pension.

Altmann says the survey findings support calls for changing retirement from a cliff-edge event to a long-term process through allowing part-time workers to take part of their pension, introducing age discrimination legislation and improving job opportunities for older people.

The survey, which questioned more than 6,000 respondents, shows that only 4 per cent support the present tax regime that gives bigger tax breaks to higher-rate taxpayers, with 57 per cent in support of level relief across the board and 29 per cent wanting higher relief for lower-earners.

A massive 92 per cent want the tax-free lump sum retained while the introduction of moneyback annuities was supported by 91 per cent, with 77 per cent saying it would make them save more.

Altmann says: “The points that the Green Paper should take on board from this research are that people want retirement to be a gradual process and not a cliff-edge process. They want annuity reform because they do not understand annuities, yet once they buy one they are stuck with it and they support incentivisation.”

Scottish Equitable pensions development manager Margaret Craig says: “We have detected market enthusiasm among advisers for moneyback annuities.”

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