Aegon UK has called on policymakers to simplify the rules on taking annuities in retirement, with a second pensions ‘A day’, this time focusing on income in retirement.
Speaking at the Association of British Insurers (ABI) annual Savings Conference “Living Longer, Living Better” Otto Thoresen, chief executive of Aegon UK, called for an overhaul akin to the first ‘A-Day’ in April 2006, which simplified tax rules for people saving for retirement, making pensions more popular.
Thoresen called for a shake up of tax laws for taking an income in retirement and to review the law that forces individuals to buy an annuity at age 75.
He said: “The basic annuity rules are inflexible. They were set decades ago as a way of addressing the risk of longevity. The risk that people will run out of money towards the end of their life – and so fall back on the state. But people face more risks than just longevity. The solutions we offer to people must help them live their lives in retirement cannot just tackle one risk. They need to be broader, more comprehensive, and importantly to give people flexibility.”
He also suggested that widening out access to advice to enable people to make informed choices in retirement income. This could be achieved through focusing public attention on retirement planning, offering those approaching retirement practical help to explore the financial market, building on Money Guidance, and encouraging employers to provide access to retirement advice in the workplace.