The Tories have made a pledge; that you don’t have to take UK annuity rates at 75 years of age. The Conservative Party has therefore been urged to forge closer links with the financial services industry to help it develop its various policies. Industry figures say a recent speech by George Osborne, delivered at the British Museum, contained some ‘encouraging’ ideas on improving Britain’s savings and pensions culture. However, Conservative policy on improving people’s long-term savings is lacking in detail, and Osborne will need to work closely with the finance industry to create a system which works.
One of Osborne’s headline policies, a change in the age-75 annuity rule, which forces people to buy an annuity, and take UK annuity rates, or use the heavily-taxable alternatively secured pension (ASP) when they reach the ripe old age of 75, is not detailed enough according to income drawdown providers. John Moret, of Suffolk Life, says politicians tend to ignore ASP and therefore fail to understand the real issues facing people who don’t want to purchase an annuity. He suggests that no one is forced to buy an annuity at age 75 because they can use ASP as an alternative, and we really need to tackle what puts people off using ASP, which is no doubt the 82% tax on death.
