New rules over annuities urged

Tuesday 17 March 2015

UK Chancellor George Osborne is coming under pressure from within the coalition to allow millions of pensioners who missed out on the Government's pension reforms the freedom to cash in their annuities.

From next month, people will be able to cash in their pension savings when they retire rather than purchase an annuity - providing an annual income - under reforms announced by Mr Osborne in last year's Budget.

Liberal Democrat Pensions Minister Steve Webb said that he was now pressing the Chancellor to allow the same freedoms to the six million pensioners who already have annuities.

"The Budget freedoms were great but my concern was always the people who missed out. My argument has been that if it's right that people can choose capital over income, why isn't it that they can go back to capital if they want to (having already bought an annuity)?" he told The Daily Telegraph.

"It struck me as particularly unfair that people who had been forced to buy an annuity could do nothing for the rest of their lives.

"I floated the idea to colleagues within government and to the industry to see if there would be buyers for annuities and I think there would."

He said that had pressed Mr Osborne to "as much progress as we can make within this parliament" before it was dissolved at the end of the month ahead of the general election.

"There isn't time to make all those sorts of changes in the next few days, but clearly the electorate wants to know when they are voting where the different parties stand," he said.