Personal Finance

Workers 'prefer annuity option'

The majority of workers would rather maximise their retirement income than leave an inheritance from their pension fund behind, research has revealed.

Just 32% of those questioned by Consumer Intelligence said they would prefer to have a lower pension or have a plan that might not last their lifetime, if it meant that their heirs could inherit parts of their pension fund.

But 60% of those quizzed by researchers declared that they would rather buy an annuity which provides a yearly income for the rest of their lives.

To combat people becoming a burden on the state, the Government is planning to scrap the rule which says people need to use their pension pot to buy an annuity by the time they reach 75.

The Government is also examining what tax treatment should be adopted for funds gradually saved towards pensions that have benefited from tax relief.

Officials are hoping to make sure that pension funds do not become a "tax privileged" way of passing on wealth.

Sam Jackson

Money Dashboard