Pensions - Articles - Partnership comments on changes to pension tax rules

 Commenting on the Chancellors Announcement with regards to Pensions Tax, Steve Groves, Chief Executive of Partnership, said:

 “Today’s announcement means that from April 2015, pension savers will no longer be penalised for living longer and will have the opportunity to leave all or part of their pension to their families. This is excellent news for the more affluent retirees but with the average pot used to purchase an annuity standing at £30,000 it is unlikely to be applicable to the vast majority who will use all their funds to make ends meet – during increasingly longer retirements.

 “Choosing to go into drawdown in order to preserve a proportion of their pension income as an inheritance could be disastrous for those who live longer than expected. We expect to see more people focus on using an annuity to secure a guaranteed minimum income which would then give them the freedom to use their other assets as they see fit – without gambling their future security. Those who choose an enhanced annuity can benefit from up to 40% more income for life compared to those who don’t shop around or take a standard product.

 “Longer term, the announcement from the Chancellor may encourage wealthier people to save more into their pensions.”