We will end the rules requiring compulsory annuitisation at 75. The only thing missing from this sentence – apart from everything – is the appending words: Discuss, in no more than 500 words.
I think I am fairly normal and have my feet on the ground enough to know that pensions are really quite boring to most people. I have also worked in pensions since I was 18, before computerisation, doing manual quote calculations, and it seems that throughout all my years in the industry, there has always been someone saying “when the age 75 rule goes…”. I will be able to say to my son I was there when the age 75 rule disappeared.
The statement has been there for so long that now when I say to others far more intellectual than me: “Remind me, what is it about the removal of the 75 rule that matters so much?” I realise that the issues have become so blurred and lost that we need to refocus on what is really required.
I will be able to say to my son I was there when the age 75 rule disappeared
What does this coalition statement mean then? Does it mean that we are all going to be given the opportunity to carry on working past 75 and defer our annuity purchase or does it mean that the Government is going to sort out the increasing mess that has been created over the last 15 years?
What has been interesting over this period is how the market has reacted and innovation has been built into products within the constraints of the HMRC regime. Without doubt, flexible annuities have been very welcome for those that have researched them and fixed-term annuity is crying out for the benefits of this rule change.
There will be many boffins poring over this issue in months to come. There will without doubt also be a significant life office lobby to ensure that the new rules are in their favour. So, what about the adviser view? Well, I am pleased to say that we have opened up the debate and to start with have launched a survey on our website, www.retirement-partner ship.co.uk, cheap plug I know, but please go there and answer the questions. It is so important to get the adviser view fed into this process.
I can honestly say that after 20 humble years doing pensions I do not have a strong view on this subject other than to say the answer will not be simple. There are so many issues such as death benefits, ensuring no fallback on the state, minimum and maximum incomes, GAD rates and crystallisation dates and keeping it all simple so people can understand. Who said pensions were boring? And I answered in 440 words.