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Pressure is mounting to scrap compulsory purchase

Annuity experts are predicting the Government may change the rules on the compulsory purchase of annuities in the Chancellor&#39s spring Budget.

Experts are hoping the Government will succumb to mounting pressure from lobbyists who believe the rules restrict individual choice and that compulsory purchase at 75 is based on outdated mortality expectations.

Winterthur Life strategic pensions manager Mike Morrison, who has been in regular dialogue with economic secretary to the Trea sury, believes the Govern ment could change rules which force pensioners to buy an annuity.

He says: “From the Treas ury&#39s perspective, if people are put off by the idea of compulsory purchase, then they are less likely to want to contribute to a pension, which goes against one of the Government&#39s main objectives.”

Annuity Bureau director Ronnie Lymburn says: “I would be surprised if there was not an announcement as the Treasury is under increasing pressure, particularly to move the compulsory purchase age to 80, which would give them some thinking time before any further reforms.”

But Annuity Direct managing director Stuart Bayliss says: “If the Government feels enough pressure, you could expect them to announce upping the age limit to 80 but if I had to put money on it I would say they are still looking at research and the pros and cons of any changes.”


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