The Government launches a
consultation on removing the requirement to annuitise by age 75
Financial
Secretary to the Treasury, Mark Hoban MP, today announced the
start of an 8-week consultation on removing the effective
requirement to annuitise by age 75, following the announcement in
the June Budget that these rules will end from April 2011.
The consultation document sets out proposals that will simplify
the treatment of retirement savings and reduce complexity for
individuals as well as for pension and annuity providers.
The reforms will give individuals greater flexibility to
choose the retirement options that are best for them, with more
choice over how they can provide a retirement income for
themselves.
Mark Hoban said:
This
Government is committed to fostering a new culture of saving and
responsibility in the UK. To encourage people to take greater
responsibility for their financial future, including in
retirement, we need to give people greater flexibilty over how
they use the savings they have accumulated. This consultation puts
forward reforms that will replace outdated and overly complex
pensions tax rules with a new system that gives individuals
greater freedom and choice."
The Government welcomes views from interested parties on how the
reforms can best be implemented, in particular the proposed new
tax framework, the proposed safeguards against individuals
prematurely exhausting savings, and how to minimise unnecessary
burdens for individuals and industry.
Notes for Editors
1. The consultation document Removing the requirement to
annuitise by age 75 is available on the HM Treasury website at: http://www.hm-treasury.gov.uk/consult_liveindex.htm
2. Responses to the consultation can be sent to: age75@hmtreasury.gsi.gov.uk.
3. The consultation period starts on 15 July 2010 and closes on
the 10 September 2010. Draft legislation for the reforms will be
published in the autumn, with the final measures to apply from
April 2011.
4. Pensions saving received tax relief worth £18.9bn net in
2008/09 (HMRC).
5. The Department for Work and Pensions calculate that 7 million
people are currently undersaving for retirement.
6. The UK has the largest annuities market in the world. 450,000
annuities were sold last year with a value of nearly £11bn
(Association of British Insurers, 2009).
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