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Govt launches compulsory annuity age consultation

By Tom Farley, Fri 16 Jul 2010 - Published in Pensions

A consultation into removing the requirement to take out an annuity at the age of 75 has been launched by the government.

Mark Hoban, financial secretary to the Treasury, announced that an eight-week consultation into the issue will take place, after the emergency Budget revealed that the requirement will be phased out by April 2011.

The study will examine how to simplify the regime surrounding retirement savings and remove red tape which makes the process complicated for both individuals and pension providers.

Mr Hoban commented: "To encourage people to take greater responsibility for their financial future, including in retirement, we need to give people greater flexibility over how they use the savings they have accumulated."

He also said the consultation document makes a number of proposals on how to reform the pensions system to offer more freedom and choice to retirement savers.

Commenting on the move, Prudential UK deputy chief executive Barry O'Dwyer claimed the government's proposals are sensible and avoid placing unnecessary burdens on the public purse.