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TPAS: Annuities 'not an issue' for majority
19 March 2008 12:00
The pensions Advisory Service (TPAS) has argued that the current debate over compulsory annuity provision is not really relevant to most people saving for retirement.
Last week, the Investment Management Association argued that it should no longer be mandatory for Britons to convert their savings into an annuity at the age of 75, although the National Association of Pension Funds has called for caution over such proposals.
Yet according to TPAS technical director Des Hamilton, this debate has been ongoing for several years now, with some people lambasting the lack of choice over annuities, but he insisted that this is only really a concern for Britons with substantial sums of money.
He explained that the alternative is to take the risk of maintaining their investments and drawing on them throughout their retirement, as well as possibly relying on other assets, neither of which option is genuinely available for the vast majority of savers.
Mr Hamilton also argued that compulsory annuities are not discouraging people from preparing for retirement earlier, as the main issues for young Britons are an inability to put cash aside, affordability and a failure to consider pensions until they reach their 40s.
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