Compare Annuities  

Get latest annuity rates now

Free Pension Healthcheck  

Get a free online consultation now

Skandia: Chancellor puts trust in savers

Skandia has responded to the Budget by suggesting it presents two major long-term boosts for savers.

The firm welcomed the increase in the ISA allowances, and the end of the difference between cash and equity ISAs.

Skandia also praised the increased flexibility on withdrawal of money from pension schemes, which the firm described as the final nail in the coffin of forced annuities.

Although annuities would still be an option for those who want guaranteed income, Skandia asserted, the Budget announcement offers a major boost for those saving for retirement and greater flexibility regarding how they use their savings to fund their retirement.

In the short term, from 27 March 2014, several other pension changes take effect.

The amount people from age 60 can take as a one-off income payment from pension savings rises from £18,000 to £30,000, and the maximum people can take out from a capped drawdown arrangement is rising from 120% to 150% of an equivalent annuity.

In addition, the amount of guaranteed income needed in retirement to access flexible drawdown has decreased from £20,000 to £12,000 per year, and the maximum size of a pension pot that can be taken as a one-off lump sum has risen from £2,000 to £10,000.

According to ABI data around a quarter of annuities are for pension pots under £10,000.

Adrian Walker, pension expert at Skandia, said that at face value the Budget changes announced were a great boost for savers, and that greater trust has been placed in the public to take responsibility regarding their retirement income.

Walker added that with greater flexibility and choice demand for advice was also likely to rise.

Comments (0)

There are no comments.

Leave a Reply