AEGON says the Government’s consultation on ending the effective requirement to purchase an annuity at age 75 by 2011, published today, is a significant step towards making pensions legislation fit for retirement in the 21st century.
AEGON believes the current rule, which forces people to take retirement income by their 75th birthday, denies people the flexibility they need to manage their income needs in later life.
AEGON welcomes the review’s proposals to give people greater choice in how and when they take income and tax-free cash in retirement and ending the arbitrary cliff edge for tax on death benefits at age 75. However it also cautions that removing the age 75 trigger for action is likely to mean people will need more advice to help them make the right decisions on securing their retirement income.
AEGON also urges the Government to resist taking a piecemeal approach to further legislative changes. AEGON has previously called for an overhaul of the retirement tax rules to reflect increases in longevity and the changing nature of retirement. AEGON believes this is essential to create the more flexible framework future retirees will demand.
Kate Smith, Pensions Development Manager, says:
‘Overhauling antiquated rules to give people more choice is a very welcome move from the new Government. We have to recognise that retirement has changed and a fresh and more flexible approach is needed to meet the demands of a new generation of retirees.
‘But if we want a premier retirement framework that’s truly fit for purpose in 21st century UK we need to stop making changes in isolation. We must take this opportunity to have a complete overhaul of retirement rules and consider how they tie up with long-term care provision. We need to look at what will encourage people to start and keep on saving in a pension and how we can give them the flexibility and security in income they need as they move through the different stage of retirement. We look forward to working with the Government to achieve this aim.’
Notes to editors
AEGON published its suggestion for a holistic approach to reviewing retirement legislation in its Pensions Manifesto: The Pensions Crunch – proposals for change, in April 2010.
In the UK AEGON offers pensions, life insurance, asset management and financial advice to around two million customers. AEGON UK has assets under administration of £53.6 billion and employs approximately 4,500 staff.
As an international life insurance, pension and investment company based in The Hague, AEGON has businesses in over 20 markets in the Americas, Europe and Asia. AEGON companies employ approximately 28,000 people and serve some 40 million customers across the globe. AEGON’s revenue generating investments totalled EUR 388 billion at 31 March 2010.
For further information
Pensions Development Manager
T. 0131 549 6445
Press Relations Manager
T. 0131 549 6798 | M. 07740 897527