Sunday, 20 July 2014

New Rules To Provide Greater Choice And More Innovative Pension Products

New rules which would provide greater choice and more innovative pensions products, are expected to be announced this week.

The coalition wants to encourage pension providers to develop new retirement income products that are tailored to the needs of the individual consumer and which offer more choice, freedom and flexibility.

On Monday (21 July), the government is expected to publish its response to the consultation ‘Freedom and Choice in Pensions’.

As part of its response the coalition is expected to announce changes to the tax rules that govern the pension products firms can sell.

It is expected that the coalition will announce the following intentions:

  • To allow people to receive varying levels of income throughout the lifetime of their annuity.
  • To allow lump sums to be taken from lifetime annuities where specified and agreed with circumstances – for example if care needs arise – providing certainty that the person's income is flexible enough to meet sudden costs. 
  • To change the rules regarding payments from annuities after death – so that people can buy products which will guarantee some of their income is returned to their family if they die.