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The Government&#39s pension paradox

It has finally happened. A client of ours has declined to increase his presently modest pension contributions for the explicit and simple reason that he does not want to be bound to having to spend three-quarters of his fund at retirement on buying an annuity.

This may come as no great surprise to those of in the industry already well acquainted with the annuity crisis (and who are entirely scornful of those who try to claim that annuities still represent good value)

What is mildly surprising is that the crisis has become such common knowledge that even the ordinary layman out there on the street is aware of what it will mean to him and no longer wants to commit money to a personal pension.

This brings us back to the curious paradox of the Government saying it earnestly wants to achieve one thing (narrow the savings gap) but doing nothing and opposing measures (such as annuity reform) which might achieve those aims.

Julian Stevens

WDS Independent Financial Advisers,

Kingswood, Bristol

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