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Wake-up call may see delay on drawdown

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Industry experts point to the fact that six-month wake-up packs have yet to be amended as evidence the Government will delay the introduction of its annuity drawdown reforms.

Concern has been growing about the strain of the April 2011 deadline for new flexible annuity rules.

There is no official confirmation of a delay but FSA guidelines stipulate that wake-up packs are sent to annuity customers six months before retirement age.

Standard Life head of pensions policy John Lawson says the drawdown changes would require the literature to be rewritten. He says: “The letters for people who were going to retire in April next year were issued in early October and the new options are too significantly different for them not to be included. I think this is going to be delayed another year, they have given themselves two years anyway by extending the temporary age for coming out of drawdown to 77 rather than 76. The longer this drags on, the more likely it becomes and, in terms of building and testing systems, we are already short of time.”

Aegon senior pensions development manager Kate Smith says: “As far as we can tell, the Government has not come up with a solution for the minimum income requirement, in terms of at what level it should be set and what it should consist of. We understand there are also concerns about abuse and tax avoidance. If it is rushed into, there is a real risk of consumers losing out.”

A Treasury spokeswoman refused to be drawn on any amendments to the timetable of the reforms. A response to the consultation, which is now closed, will be issued on December 9.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. This article is at odds with the one on Professional Pensions which says that the rules will be published on the 9th of December.

    http://www.professionalpensions.com/professional-pensions/news/1895198/govt-publish-annuitisation-plans-december

  2. This article is at odds with the one on Professional Pensions which says that the rules will be published on the 9th of December.

    http://www.professionalpensions.com/professional-pensions/news/1895198/govt-publish-annuitisation-plans-december

  3. I’m all for getting it right first time and the deferral of decision to age 77 earlier this year gives the Government the room to get the legislation right and also for the industry to get up to speed in respect of knowledge and systems before it comes in the effect.

  4. There is plenty of time with the deferral to age 77 so please use it to introduce the legislation properly. Don’t rush it then have to make amendments because you did not spend enough time on it in the first place like most reforms introduced.

  5. This article is at odds with the one in Professional Pensions which says that the rules will be published on the 9th of December.

    http://www.professionalpensions.com/professional-pensions/news/1895198/govt-publish-annuitisation-plans-december

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