We have now had an opportunity to review the Government proposals and come to some initial conclusions. Anyone who thinks that they will be able to just lay their hands on their pension pots is very much mistaken – they will need to prove they have sufficient guaranteed income (via a pension) to mean that they will never fall back on the State. Add to that the fact that they will be taxed on any withdrawal they make at their highest rate and on death any fund not used to buy a widow’s pension will be taxed at an eye watering 55%.
I suspect that what this means is that for most people the guarantee provided by an annuity will be compelling. Having said that we do welcome the extra flexibility but again must reiterate that The FSA needs to get a hold of the critical yield calculations used by providers. They are vastly misleading and unless action is taking will be the mis selling scandal of 2015.
Annuity Direct Website
