Financial experts and the Conservative party are calling on the government to take urgent action to protect pension investors forced to buy pension annuities in volatile markets. There are many thousands of people approaching retirement age who are being forced to cash in their pension funds and buy a pension annuity, because of existing rules.
People approaching the age of 75, in income drawdown contracts, are joined by those individuals in personal pension arrangements, who, after taking their tax-free cash, have to buy a pension with the balance of their pension fund.
But, while income drawdown is an option for many as an option to buying an annuity, a far greater number of people do not have funds that are of a sufficient size to warrant income drawdown.
The Government should introduce immediate legislation to enable those people coming up to retirement to access their tax-free cash and source income from the remaining funds without requiring them to purchase an annuity at what is an unsuitable time.
This sort of change has been called for over the past few years. Perhaps now is the time to do something about it, before too many people lose out.
