A number of consequences may follow if the Government, as expected moves to abolish the Default Retirement Age (DRA).  The UK Equality Minister, Harriet Harman recently described the current DRA as “arbitrary” amid signs that the Government may push through a review of the UK’s Default Retirement Age which could possibly see people working into their 80’s.  Some pension experts have been calling for the “DRA” of age 65 to be scrapped because it no longer reflects increasing longevity and the needs of many people to work beyond age 65.  In addition being effectively forced to retire and buy a pension annuity at an arbitrary age may trap many into buying an annuity too early for personal preference and lock up their pension income at an unsuitable time for them.

A report commissioned by a major Pension provider commented that one in three 46 to 65 –year-olds want to keep working on new jobs (albeit on their own terms), after age 65.

Developments like this point up the urgent need for people to save more for their retirement and also for flexible annuities to become more a more widely available option to give people at retirement greater choice as to how they take the benefits, how much they take, and enable them to phase retirement plans in conjunction with their earnings in later life.

At least one major provider has plans to launch new flexible annuity contracts to help manage income and cash benefits from pensions in the next few weeks.  Watch this space.