Capped incomes for pensioners

According to recent news reports, the maximum income that an individual can now withdraw from their pension will be officially capped at 100 per cent of the equivalent annuity. This capped amount will be reviewed after three years review until that person reaches the age of seventy five.

Also, it has been revealed that a 55 per cent tax will be applied to death benefits, which differs from the current 35 per cent charge.  

Barry O’Dwyer commented: “An MIR of £20,000 makes sense. The level shows we’re in an era of intelligent policymaking with the Government taking its responsibility to taxpayers seriously.... The new proposals modernize retirement income while keeping the elements that currently work best.”

A recent pensioner stated, “I am glad to see the Government looking at the pension system as I think there has been a lot wrong with it for a long time. Many pensioners are worried about what the future will hold, these are economically difficult times and some people aren’t even considering the retirement age they wanted to because they simply do not have enough money or enough of a saving to consider retiring yet. I find this really difficult because after a long working life you deserve to be able to slow down and not have to worry about you annuity rates and your income. You should be able to live without money problems but unfortunately, this is a distant dream for many. ”

If you need to find out what annuity rates you can get, try using an annuity rates calculator. There is a lot to think about when it comes to annuities and things to consider such as tax which can be daunting and confusing. Speaking to a specialist definitely helps to add some clarity to the situation.