Pension liberation as government ends compulsory annuities
Some enormous news on pensions. On the grounds that people should be trusted with their own finances, George Osborne's announced a liberalising new set of freedoms for pensioners.
The government's getting rid of the restrictions on taking money out of pensions, with nobody now having to take an annuity.
It's also cutting the income requirement for drawdown from £20,000 to £12,000.
£10bn of pensioner bonds will be on offer, available for those aged 65 years or over from next year, will be issued. A maximum of £10,000 can be saved in each bond.
The bond will be run by NS&I, paying 2.8 per cent for one year and 4 per cent over longer terms.
Commenting on the pension schemes announcement, John Overs, partner at Berwin Leighton Paisner, said the news is good for the financial services industry and the more choice it gives pensioners will mean that "while companies will earn less from annuities, they will see an uplift from the sale of other products. This will be a mutually beneficial situation for companies and individuals, leading to greater diversity and competition within financial services."
absolutely amazing pension news. No moreannuity reqd. No 55% tax charge, only marginal rates. Everyone get access to face to face advice
— Ros Altmann (@rosaltmann) March 19, 2014
Read our full summary of the budget here.