An annuity is a regular monthly income source that savers, largely from private sector companies, receive at retirement in exchange for their lifetime pension savings. Now George Osborne has said that around five million pensioners, who have used their retirement savings to buy an annuity, will be allowed to sell it for a cash sum after March 2016 and consultation has begun on how a second-hand annuity market might operate and be regulated.
Women retiring in 2015 expect a retirement income 25% lower than men, according to the Prudential’s annual ‘Class of’ research. However, the research also reports that the retirement income gender gap is at its lowest since 2009, when Prudential first started tracking the difference between male and female retirement income expectations as part of its ‘Class of’ research. Women appear to be increasingly optimistic about their finances in retirement.
The New Pension Freedoms Checklist: Four Things You Must Do Before Making Any Decision About Your Savings
The new pension freedoms are great news for savers, with more flexibility and options for retirement now available. However, the freedoms also come with a level of risk, particularly for that first wave of savers looking to exercise their new rights in the next twelve months or so.
The UK has slipped by four places to 22nd in a global survey looking at the countries with the best – and worst – retirement security, according to a recent Professional Pensions article. Switzerland was named the top performer in the Natixis Global Asset Management CoreData Global Retirement Index (GRI), followed by Norway, Australia and Iceland.
From April 2015, those over 55 will be allowed to take as much money from their pension pot as they like, when they like, until the money runs out, dependent on the rules governing their individual pension scheme.
Ahead of the forthcoming pension freedom reforms in April, Pensions Minister, Steve Webb, has called for even further changes to the UK pension industry, to make life easier for retirees. Speaking at The Resolution Foundation in London, Mr Webb advocated for the creation of a dedicated Government Pension Department, amid a raft of further suggested reforms based on his experiences to date.