Pensions: Annuities

Treasury written question – answered on 24th November 2010.

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Photo of Zac Goldsmith Zac Goldsmith Conservative, Richmond Park

To ask the Chancellor of the Exchequer when he plans to introduce transitional measures for those yet to secure a retirement income who will reach 75 years before his Department removes the requirement to purchase a pension annuity.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

The June Budget announced the intention to end the existing rules that create an effective obligation to purchase an annuity by age 75 from April 2011, including transitional arrangements for those yet to secure an income who will reach age 75 in the meantime. These ensure that those up to the age of 77 will not be required to annuitise their pension savings while the changes to the legislation are put in place.

These transitional arrangements were included in the Finance Bill introduced after the emergency Budget which received Royal Assent on 27 July 2010. The relevant parts of the legislation setting out the transitional rules are section 6 and schedule 3 to the Finance (No. 2) Act 2010. The transitional measures are also explained in Budget Note 22, which can be found on the HM Revenue and Customs (HMRC) website at:

http://www.hmrc.gov.uk/budget2010/bn22.htm

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