For several decades the UK has had legislation that requires that the majority of funds saved in tax-favoured defined contribution pensions should be used to purchase an annuity in retirement. For a long time the UK has been unusual in having this kind of compulsory annuitisation but recently a number of other countries – notably the United States and Australia – have started to think about moving in this direction. However, just as others have started to do this, the UK government dramatically and unexpectedly announced (in April 2014) that they would remove this requirement. The law was changed with effect from 6 April 2015. This article explains how the law has been changed, what the effects might be, and how widely the effects might be felt.
Authors
![Person graphic](/sites/default/files/styles/square_desktop/public/2022-06/IFS-person-graphic.png?itok=hWCtTSrz)
Gemma Tetlow
Report details
- Publisher
- Center for Research on Pensions and Welfare Policies (CeRP)
Suggested citation
Tetlow, G. (2015). Swimming against the tide? Increasing flexibility to withdraw money from private pensions in the UK. Moncalieri: Center for Research on Pensions and Welfare Policies (CeRP). Available at: https://ifs.org.uk/publications/swimming-against-tide-increasing-flexibility-withdraw-money-private-pensions-uk (accessed: 1 July 2024).
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