John Perks, LV= retirement solutions director, commented: “We support a more joined up approach in Government thinking, designed to ensure a brighter future in retirement for all, as well as being affordable for the Government. But this needs a wider review of individual measures than those currently being examined.”
LV= believes that removing the compulsion to buy an annuity at age 75 will remove a barrier which is cited by many as a disincentive for people to save into a pension. However, this will only truly work if the alternative is something that people can easily understand, and that will truly provide flexibility in being able to unlock retirement income from a pension fund.
Overall, LV= agrees with the approach, but believes it does not go far enough. While the need to purchase an annuity or go into ASP at age 75 has been removed, the requirement to check against the lifetime allowance at age 75 has been retained. LV= proposes that in many instances the need for checks against the lifetime allowance could be abolished.
John Perks continued: “While we appreciate that the Government does not want people falling back on the state, any safeguards need to be proportionate. We believe that a simpler system that may, in rare circumstances, allow someone to fall back on the state is much better than one that removes all such possibilities. We feel that in the simpler regime people will be much more likely to build up savings and reduce the risk of them depending on the state."
