'Money Back Guarantees' For Annuities
In the UK, the purchase of an annuity for those with private pension funds is compulsory. Wealthier people, i.e. those with a fund worth at least £100,000, can delay the purchase until age 75 using Income Drawdown to provide income. If they die early, their estate can keep the residue, subject to 35% tax. Altmann has campaigned for capital protection since 2002, arguing that drawdown provides refund guarantees that poorer people are denied. She believes that providing an immediate cash return, less tax, for everyone would enhance the reputation of annuities and encourage more people to take out private pensions. An additional benefit would be that those opting for drawdown purely for capital protection would have no need to take the higher risk.
Read more about this topic: Ros Altmann