Pensions minister Ian McCartney has ruled out annuity reform because he believes it would benefit only the very wealthy.
At a fringe meeting at the annual TUC conference in Brighton this week, he said he had not seen any evidence that relaxing annuity rules would benefit the average pensioner.
Answering a question from the floor, McCartney said: “Some of the arguments being pressed on the Government are valuable only to the very wealthy. I would resist such a change. I have got nothing on my table that suggests to me we should be damaging the concept of providing a lifetime income for people.”
Scottish Life head of communications Alasdair Buchanan says: “The effect on many individuals of the current regime is that many are put off saving for retirement through pensions. The Government might look at opportunities to remove the barriers.”
Wentworth Rose managing director Philip Rose says: “Would any of the delegates at the TUC see themselves as filthy rich fat cats? Yet someone on an occupational NHS scheme might be retiring on a pot of up to £300,000.”
Retirement Income Reform Campaign chairman Dr Oonagh McDonald says: “Unfortunately, there is a failure to understand how annuities work. The long-lived, who are usually the wealthy, benefit the most because they are subsidised by those dying early, usually the less well off.”
The TUC is expected to pass an amendment calling for compulsory employer contributions into pension schemes. Pension committee chairman Tony Young said compulsion is necessary if stakeholder is to succeed.