PRESS RELEASE

14 JANUARY 2002

ANNUITY REFORM NEEDED- OTTAWAY

Richard Ottaway, Conservative MP for Croydon South, today supported the Pension Annuities (Amendments Bill) introduced in the House of Commons, which provides for reform of the obligation to buy an Annuity on retirement. (see House of Commons Hansard, 11 January, col 822 -col 824)

Mr Ottaway says:

Retirement Annuities are no longer good value for Pensioners. We live in an era of changing work patterns, longer life expectancies, and lower interest rates. Annuity returns are nearly half what they were 15 years ago.

Someone can build up a substantial money purchase pension fund only to find it produces a minimal income return. The Government has not acknowledged this changing trend and the financial services sector has no alternative but to go on offering poor value pensions.

Providing an individual has a sufficient income to keep him of the Welfare state there should be much greater flexibility over the investments of an individuals pension. He should be free to invest it in a much more flexible way and to pass it on through the generations.

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