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The PPI is an INDEPENDENT educational, not-for profit research institute. We undertake rigorous research from a neutral, long-term perspective

Reports and Briefing Notes

Retirement income and assets: the implications of ending the effective requirement to annuitise by age 75

Until June 2010, individuals with Defined Contribution (DC) pensions were effectively required to annuitise any remaining private pension savings (after taking an optional 25% tax-free lump sum) by age 75. As a response to calls for more flexibility, the Government has removed the effective requirement to use private pension savings to purchase an annuity by age 75.1 The Government’s stated policy objective is to make pension saving more attractive by giving individuals greater choice over how they provide a retirement income for themselves.

The fifth report in the PPI’s retirement income and assets series looks at the future of retirement income and assets in the UK. This report explores how the new legislation could impact on the risks people face when accessing private pension savings and on individual financial outcomes in retirement.

The PPI would like to thank the sponsors of this research report which included: the Association of British Insurers, the Department for Work and Pensions, the Investment Management Association, Partnership, Prudential UK & Europe and Which? 


Chapter one examines the income needs that individuals have in retirement and explores how different methods of accessing private pension savings could expose individuals to different types and levels of risk.

Chapter two explores current trends in how individuals with Defined Contribution pension savings access their private pension savings and what these might indicate about future behaviour.

Chapter three explores the potential impact of removing the requirement to annuitise by age 75, and the proportion of pensioners that might be able to use Capped or Flexible Drawdown.

Chapter four explores the potential impact on individuals who earned at low earnings during their working life.

Chapter five explores the potential impact on individuals who earned at median earnings during their working life.



Executive Summary

Executive Summary

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