Compulsory Annuity

Some countries require that residents purchase annuities with some portion of their assets by a certain age as they consider consider partial annuitization to be in the best interest of their residents. For example, the United Kingdom (UK) requires—under certain conditions—that residents purchase an annuity by age 75. Any tax-advantaged pension savings such as a personal pension plan or a defined contribution plan must be annuitized, and UK residents must do so with 75-100% of these assets by the time they turn age 75. Also see related term compulsory annuitization.

U.K. Government Considering an End to Compulsory Annuity Purchases

British lawmakers are considering an end to the law that requires many U.K. retirees to purchase an annuity by the time they turn age 75. As an interim step, the U.K Chancellor modified the current law so that the age for compulsory annuitization is increased to 77 from the current level of 75 years of age.

Glossary:

Annuity

Annuitization

Compulsory Annuitization

Key Phrases: