I have written a lot about how poor the service is from insurers and also about the way in which the goverment are proposing to change the rules for annuity purchase at age 75. It now transpires that those reaching age 75 who are in unsecured pension will have to stop taking income because insurer’s systems cannot cope with the change. So far it seems that only clients with arrangements at Aegon, Standard Life and Prudential will be able to continue to draw income. This means that a 75 year old may have to stop taking income or transfer (at cost) to a new provider who has the systems to enable income to continue.
Frankly I am appalled – if their systems are so poor as to reduce the income of someone in their mid seventies then they have no right to stay in business. Once again the insurer’s insatiable greed for new business without proper systems is displayed.
There is another twist in this 75 tail. We have identified a couple of clients who have guaranteed annuity rates and under their policy the guaranteed will run out once they reach age 75. The insurers will not extend the guaranteed rate beyond 75 and so once again great care has to be taken when deciding what to do.
Please also remember that if tax free cash is not taken before age 75 it is lost.
This whole issue is turning into a night mare – not helped by the pathetic systems of a number of mainstream providers.
Annuity Direct Website
