(PRWEB UK) 31 August 2012
The new regulations being implemented in the UK could have considerable implications on annuity rates, it has been discovered. Crucially, this could affect the overall retirement income of those considering retirement.
A recent timeline that will introduce the new regulations has come under attack from the National Association of Pension Funds, whereby there are amazed at the short length of time the industry has had to research and assess the impact of the new regulations.
Darren Philp, from NAPF, commented that there are a variety of complex issues that need to be reviewed due to the introduction of new regulations. Furthermore, ex-Government advisor Dr. RosAltmann, alluded to the fact that annuity rates could plummet even further after the EU regulation changes. This would then result in insurance providers keeping hold of gilts; subsequentlymeaning that interest rates on assets will drop.
Overall, this would be damaging, as there would be lower annuity rates for each pension fund. It was also added that the retired would receive less from their insurance provider due to the new regulations. Pensions minister Steve Webb has commented that he will challenge the decision to implement the new regulations and confirmed that the government will not back down on this matter.
Webb criticised the regulation changes and stated that individuals in the UK could lose billions. Furthermore, the changes could result in some pension schemes closing. Citywire recently commissioned a report on the issue of the new regulations and stressed the importance of shopping around before locking in to an annuity.
Scott Mullen of My Pension Expert said "It is now more crucial than ever to make the decision wisely as it could make a huge impact on the amount of income that is paid out."