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Pickering rejects annuity purchase compulsion

Pensioners should not be forced to buy an annuity but must ensure they have a regular income for life, according to Alan Pickering.

Speaking at the Chartered Insurance Institute&#39s annual conference in Birmingham last week, Pickering said he disagreed with the notion that the Government should dictate how the income stream from pensions is decided.

He did not call for the scrapping of the obligatory purchase of an annuity at 75 but said providers should be encouraged to design alternative products which offer lifelong inc-ome to pensioners.

Last year, the Treasury launched its review of the annuity regime which proposed limited relaxation of what providers can offer but did not suggest scrapping the age limit.

It is thought the review has become part of the bigger reform of pensions as a result of Pickering&#39s pension simplification report, published in July.

Pickering told the conference: “We should back off from some of the Governmentimposed measures at the extreme of pensions. I believe there should be a regular stream of income but what form that takes should be up to the individual and not the Government.”

Annuity Bureau director Ronnie Lymburn says: “Pickering appears to have cleverly avoided mentioning scrapping annuities while at the same time saying that the vehicle by which retirement income is realised should be up to the individual. I think a lot of people will be sympathetic to that view.”

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