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15-Jul-08 11:15 [Pensions]
Problems with annuities voiced in Parliament The Liberal Democrats have called on the government to reform pension law and postpone annuity purchase by ten years, the Daily Telegraph reports.
Lord Oakeshott, treasury spokesman to the party, said that the law should be amended due to people living longer than before - lifting the deadline to buy annuity by ten years to 85 years old.
The current pension laws require UK taxpayers to buy a lifetime annuity from insurers - failing to do so before the age of 75 would result in a tax rate of up to 82 per cent.
He told the Daily Telegraph: "Life expectancy has increased by over 10 years since the compulsory date was fixed at 75 years.
"A 75-year-old today is a very different person from a 75-year-old a few years ago."
Lord Oakeshott also disagreed with the laws that forced people to take annuities, especially if they still had "many years to live".
Fool.co.uk revealed results last month of a study which showed that postcode annuities could result in bigger costs for those in places with a higher life expectancy.
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