June Budget – Deferring pension annuity decision
New legislation is to be introduced which will remove the obligation for an individual to buy an annuity using their pension fund by the age of 75. There will be two related changes which will also apply for the purposes of the inheritance tax (IHT) charges that specifically apply to pension scheme members aged 75 and over.
As from June 23rd 2010 anyone who has yet to reach age 75 will be able to defer a decision to purchase an annuity until age 77.
This is a stop gap measure as the intention of the coalition Government is to abolish, from 6 April 2011, the effective requirement to use a pension fund to buy an annuity.