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Providers look beyond annuities in bid to beat Budget blues
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by Rosie Sells on May 19, 2014 at 10:30
The 2014 Budget dealt a hard blow to pension providers but recent developments have marked a fight back against the forecasted death of annuities.
On 19 March, chancellor George Osborne announced the abolition of the 55% tax on pension withdrawals at retirement, replacing it with retirees’ marginal rate of income tax from April 2015. He said: ‘Let me be clear, no-one will have to buy an annuity.’
He also announced interim measures: from 27 March 2014 savers only need a guaranteed pension income of £12,000 for flexible drawdown, reduced from £20,000. And the capped drawdown limit was increased from 120% to 150% of the Government Actuary’s Department rate to add more flexibility.
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