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.
It is reported that this interim measure will be followed in the near-term by a complete abolishment of the mandatory annuity purchase law.
Under the current law, British citizens who have a money purchase company pension plan that is tied to equity market performance are required to purchase an annuity by age 75.
The thinking is that the purchase of an annuity or "personal pension" provides the basis for sound and lasting income in retirement.
Current U.K. lawmakers seem to believe that the current requirement places too much restriction on retirement finances.
While stopping well short of mandatory annuitization, U.S. lawmakers are currently considering measures that would encourage broader adoption of guaranteed lifetime income products such as annuities.
Source: Guardian
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