Skandia feel that calls to temporarily end forced annuitisation at 75 do not nearly go far enough. They are suggesting that compulsory annuity purchase should be abolished forever rather than just until the current economic turmoil is over.
Currently, those having to buy annuities are being “hammered” with falling interest rates set to lower annuity levels further, and declining equity prices severely reducing the value of pension funds.
This will result in significantly lower retirement incomes for people being forced to take an annuity now just because they are turning 75. They could still have years in retirement, but be forced to financially struggle.
Skandia are calling on the Government to take a decisive step and bring an end to compulsory annuity purchase. This would help people take control of their retirement income and not be forced to lock in to annuities that are currently seriously depressed.
The situation warrants a review. We’ll have to wait and see what happens.
