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Flight calls for annuities at 75 to be abolished

Tory MP Howard Flight is calling on the Government to abolish the compulsory purchase of annuities for people aged 75 and over.


He believes the move is necessary because people coming up to 75 are being forced to take out annuities at a time when rates are very low.


Flight says: &#34In the current financial climate where the cost of annuities has nearly doubled, it is ridiculous to force people to buy an annuity at the age of 75.


&#34Although abolishing compulsory purchase is not a solution to the larger problem that people will not be able to buy the pensions they had anticipated, it will alleviate the position for those in their 70s with money purchase pension funds who have not yet purchased annuities.&#34


The Government claims it is currently exploring the issue but Social Security Secretary of State Alistair Darling admits it is unable to make any &#39immediate promises&#34 right now.


But Standard Life marketing manager Andrew Black says he does not expect the Government to change its rules and questions whether such a change would be wise.


He says: &#34From a tax point of view the Government might loose out because by abolishing the age restriction they would not collect taxes made on pension until later and might miss out totally if they die early.&#34

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