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Former gov't pensions expert attacks Budget annuity plans

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Former gov't pensions expert attacks Budget annuity plans

A former government pensions adviser has attacked the chancellor George Osborne’s plans for increased pension flexibility, according to reports.

Chris Daykin, who was government actuary from 1989 to 2007, told The Financial Times that the dramatic pension reforms were motivated by a desire to bring forward tax revenues and could leave pensioners worse off.

In the Budget chancellor George Osborne announced measures to dramatically increase flexibility of pensions at retirement, cutting the 55% tax charge for people accessing their entire pension at retirement from 2015.

Under the plans, savers who take their pension as cash will get the first 25% tax free with the remaining 75% taxed at their marginal rate.

The FT quoted Daykin as saying: 'I believe a primary driver for Treasury was a desire to bring forward tax revenues. The assumption must be that many retirees, given the chance, will take their money out as quickly as possible. So, presumably, the Treasury are assuming cash is taken quickly, if not immediately, and that it is mostly going to be taxed at standard rate.'

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