Budget outlines temporary age 77 rule

Does that mean that ASP will no longer exist? What will the death benefits of the "new" regime be? Are we getting closer to the pension simplification that we were originally promised?

Compulsory Annuitisation at age 75?

http://finawqs.blogspot.com/2010/06/how-are-age-75-pension-rules-changing.html

If I am reading the above article correctly, then people will be able to pass their pensions down to their descendants with a 35% tax charge...that is a major breakthrough for pensions...back of the net! (I had to get the world cup in somehow!)

Common sense prevails at long last, opening a window for those close to the current cut off point at age 75, whilst enabling proper consultation on scrapping the compulsory annuitisation in the meantime.

Kevin, that's basically what they're saying. In the short-term, they seem to be shifting the USP-to-ASP switchover from 75 to 77...and also canning the tax charges that apply on ASP death benefits...albeit as interim measures.

Go here to download the Budget Notes. Its BN22: -

http://www.hm-treasury.gov.uk/d/junebudget_notes.pdf

13 years of Gordon destroying our industry and I had almost forgotten what a good things pensions are - all hail the coalition :-)

My Mum is 75 on 3rd July. I have infomred her she may have the option to deffer the compulsory annuity, pending todays announcment. This looks like she can to me. But should she died after today and before new ruling is brought in 2011/12 a 35% tax charge could apply on the lump sum payout.

Have I got this right?

At last some common sense and a clear direction from government. These are usually in short supply. Away with the rules that basically say the Government knows best how to look after you. Looks like this will benefit all involved here.

ASP isn't compulsory annuitisation so I don't understand why the government keeps banging on about scrapping something that no longer exists.

The problem that needs to be addressed is the shackle of GAD rates over the levels of income that may be drawn Income DrawDown and third way retirement income products. That and the punitive tax charges on unspent funds at date of death.

The Pension Income Bond will solve these things at a stroke and encourage people to turn their funds into tax revenue raising income. It might well also encourage people to start and/or resume funding for retirement, so there could be benefits all round.

Julian,

Until the budget ASP was deeply unattractive and unsuitable for most personal pension cusomers, with their small pension funds and cautious attitude to risk.

I do strongly agree with your last paragraph, as the changes must be good news for more people and will hopefully make pensions more attractive for everyone.