Information: For immediate release Monday 19 April 1999

INCOME IN RETIREMENT - ARE ANNUITIES THE ANSWER?

At the heart of all the consultation about future pensions policy there lies an unspoken question. "How will people get their income in retirement?" Yet, as the Institute for Fiscal Studies has pointed out, it is difficult to see why the Government’s target group for Stakeholder Pensions should take out the new product rather than an Individual Savings Account, if they are forced to take an annuity as a result.

At AUTIF we have been interested in these questions ever since we first asked an actuary to do some projections of the benefits of PEPs against personal pensions. When we did that, some years ago, the interest, and therefore annuity rates, were much higher than they are now.

Last year we asked Oonagh McDonald CBE to look at the question of annuities and try to set out what the current options are and why we have such a restrictive retirement income system in the UK. Her paper is a wide-ranging survey of the current situation and could not have come at a better time. What we hope it will do is to inform and to stimulate the search for better solutions.

For further information please contact:

Philip Warland, Director General, AUTIF, 0171 831 0898
Dr Oonagh McDonald CBE, 0181 940 5563
Clare Arber, PR Manager, AUTIF, 0171 831 0898
Susie Poote, Communications Assistant, AUTIF, 0171 831 0898

Notes for Editors:

Dr Oonagh McDonald, CBE has had a distinguished career both in politics and in financial services regulation. She has been a Member of Parliament and member of the Board of the Securities and Investments Board and the Financial Services Authority. In 1990 her seminal report for the SIB on training and competence in financial services was published.

She is now a research and management consultant, is a member of the board of the FSA Ombudsman; a Visiting Fellow of the International Institute of Banking and Financial Services at the University of Leeds; Editor; Journal of Financial Regulation and Compliance; and a member of the Consumer Panel for HSBC plc.

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