Briefing Note 66 - Freedom and Choice in Pensions: comparing international retirement systems and the role of annuitisation
At Budget 2014 the Chancellor announced radical changes to how Defined Contribution (DC) pension savings can be accessed at retirement. Currently, around three quarters of those reaching retirement with DC pension savings use them to buy an annuity. As an alternative to annuities, those over minimum pension age could invest their pot in an income drawdown product, but there were restrictions on how much could be drawn down in a given year.
This Briefing Note explores how DC savings are accessed in other countries, how this interacts with wider government policy, and what international experience might mean for how DC savings are accessed in future in the UK. The countries discussed include Switzerland, Chile, Singapore, Israel, Denmark, Ireland, Australia, Canada and USA.
PPI held a Supporting Member’s event to discuss HM Treasury’s Budget consultation paper on Freedom and Choice in Pensions, which seeks views on changes to the taxation of DC pension savings and how they are accessed in retirement. To read the event report, please click here. The event and the Briefing Notes mentioned above form part of the PPI's response to the HM Treasury consultation.
To download Briefing Note 66, please click here.
To download the press release, please click here.
Keywords: longevity, life expectancy, Defined Contribution, HM Treasury, switzerland, chile, singapore, denmark, ireland, australia, canada, usa, international, Budget, trivial commutation, tax free, lump sum, annuity, annuities, annuitisation, annuitization, age 75, draw-down, drawdown, inheritance, pension income, earnings, assets, state pension, private pension, retirement income, decumulation