Concerns over pension irresponsibility
24 Mar 2014
Relaxed rules for pension annuities – the most radical changes since 1921 – have been questioned by many since the Budget speech.
The concerns were raised about giving pensioners greater control over their pension pots, meaning some could overspend early in retirement and therefore run out of funds. There is also a risk that released capital may make them liable for greater care home fees.
However, the Work and Pensions Secretary, Ian Duncan Smith, said recently: ‘Why would somebody who has made all the effort over the years putting money aside, both in terms of their paying of national insurance and saving on top of that for a retirement income, why would they suddenly want to go out and just behave irresponsibly, having behaved responsibly all their lives?
The changes were also welcomed by Shadow Work and Pensions Secretary, Rachel Reeves. ‘I think we can trust these people to make sensible decisions on how they want to use their money in retirement’.