Millions of savers will be blocked from transferring their pensions to access them at age 55 after the Treasury closed a loophole.
U.K. pension funds and other institutional investors should join other countries’ investors benefiting from British infrastructure and other long-term investments and rely less on the stock market, said Prime Minister Boris Johnson and Chancellor of the Exchequer Rishi Sunak in an open “challenge letter” Wednesday.
Around 10,500 people shared their pensions as part of divorce settlements in 2020, research shows.
Annuity rates have tanked by 14% so far this year, with a £100,000 pension pot now buying a 65-year-old £4,654, £759 less than at the start of the year, according to research. Rate changes have been even more pronounced for younger retirees.
A new report by the Work and Pensions Select Committee, chaired by Frank Field MP, has called on pension schemes to be forced to publish charges in full, including transaction costs. At present, new rules ushered in last April recommend pension schemes publish this information, but disclosing was made voluntary rather than mandatory.
Pension savers are being overtaxed at record levels when they dip into their retirement pots. More than 200,000 over-55s have clawed back nearly £500 million since pension freedoms were introduced in 2015.