Are the Government right to do a Pension U-turn?
The government has done a huge U-turn on Pensions and scrapped the rights of 5 million pensioners who had been promised they would be able to swap their annuity for a lump sum in former Chancellor George Osborn’s pension reforms.
The treasury has now said that this part of the reforms will be not be implemented and pensioners who already have annuities will have to keep them.
Ministers have said that the plans for the reform have been halted as pensioners could potentially be charged up to 20% fees for cashing in their annuities and that only a small proportion of pensioners would have cashed in their annuities anyway. In addition, the insurers who may have bought back the annuities are reluctant to do so with only 20% of the major companies agreeing to do so. Pensioners could also have faced thousands of pounds in fees for financial advice.
Ros Altmann a former pensions minister said:
“This is going to be really disappointing for all those people who have desperately wanted to get rid of annuities which they were forced to buy and which were often not sold properly to them in the first place.‘Now these savers will be stuck with these deals for life. The Government got their hopes up and many people will be very upset.”
What are your views? Have you been affected by this or has anyone you know? Should the government have done a U-turn? Are they simply trying to protect pensioners from unscrupulous financial advisers? Should the government have gone ahead with their promise to pensioners to reform pensions before they knew the likely outcome?
What are your views?
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alone do they not that the taxpayer cannot afford their pension and
perks maybe they look into their own I have never seen them get
a £2 a week rise yet.
I served my country also been shot at blown up and got nothing as part of my job as far as I was concerned yet they can train anyone without any medical experience to assess me again by a tick box computer questionnaire and express their opinion as to whether my manner was correct even yet its costs millions to train such for 1% that are cheats is and should be taken to courts of human rights, there are plenty worse off than myself they waste more public money than are saving .
Margaret Ferrier (Rutherglen and Hamilton West) (SNP)
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My constituent, Mr Anderson, contacted me and advised me that, despite the risks, he planned to take up the option of selling his annuity. I wrote to the Treasury and was assured only 19 days ago:
“The Government remains committed to delivering these proposals”.
Yesterday’s announcement is a betrayal of people such as Mr Anderson. I notice that the Minister did not answer the question a few minutes ago, so what exactly do the Government suggest that Mr Anderson and others do now?
Simon Kirby
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Obviously, Mr Anderson is as important as all the other people who, no doubt, will be very interested in this announcement. It transpired through consultation that a very small percentage of people would be better off. We were looking at legislation that would oblige the Government to provide guidance and advice; in the vast—very vast—majority of cases, that advice would be that it would not be appropriate and in the consumer’s best interests to proceed. There is no easy answer, but at the end of the day, I am not going to allow vulnerable older people to take advantage of what may, superficially, seem a good deal, but what, in the long term, is a poor one
Through the whole of the debate Mr Kirby relates to us, on numerous points as "Vulnerable Older people", I think of myself Older but certainly not vulnerable, my mind is very alert and my judgement is great, how dare he be so patronising about pensioners, shame on him!!!
I'm sure many people, if they could take a lump sum out of their pension pot, would spend it on cars, cruises or similar things. Inevitably, any future income from that annuity would be reduced substantially leaving them worse off in the end.
Additionally, there would be the inevitable exit penalties disguised and charges for taking a lump sum thereby further reducing the amount of their savings.
Recioe for poverty I would think!