The Association of British Insurers (ABI) is proposing that the current age limit for buying an annuity or an Alternatively Secured Pension (ASP), is raised from 75 to 80.  A number of other changes are suggested including the maximum income limits on Pension Drawdown products reducing the tax rate on lump sum death benefits for annuities, Unsecured Pension, and ASPs.

 

 It is also suggests allowing married and partnered couples with small pensions to combine their funds in order to purchase a joint life annuity. They are also asking the government to allow value protection payments on annuities to the dependants of people who die after the age of 75.

 

The reasoning behind the suggestions is that there is a wide body of evidence indicating significant and sustained increases in life expectancy and because of changes in employment requirements and the ways in which people are approaching retirement years.

 

Behind all this is a perception that the nature of retirement is changing and this needs to be reflected in new rules that give people more flexibility and control over how they take their pension.  This in turn gives rise to the need for greater flexibility in retirement income and also greater protection for the pension funds.