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Tories plan bill to fight annuities
Sunday Times - 17 November
2002
THE Conservatives are set to carry on the fight to give savers greater
freedom over how they spend their pension funds.
Senior Tory MPs are backing moves to introduce a private member's bill
aimed at reforming pension annuity rules. They hope to force the hand
of the government, which has steadfastly refused to consider scrapping
the obligation to buy an annuity before the age of 75.
Annuities, which provide an income for life, have become increasingly
unpopular. They have been criticised for locking savers into low returns
for life and preventing people from passing on their pension savings when
they die.
This week, a ballot of all opposition party members and backbench Labour
MPs will determine who will be able to introduce a private member's bill
in this session.
David Willetts, shadow work and pensions secretary, said: "If a
Conservative MP gets the chance, I hope they will introduce an annuity
reform bill. It would have the support of many of our MPs.
"The Conservative party believes people shouldn't be obliged to
buy an annuity with their pension fund."
The government scuppered a private member's bill calling for similar
reforms earlier this year, despite cross-party support. The bill, introduced
by David Curry, Conservative MP for Skipton and Ripon, suggested pensioners
should only have to buy an annuity big enough to prevent them from claiming
state benefits.
Any money left in a pension fund could then be invested at will and passed
on to heirs.
Curry's bill was backed by Oonagh McDonald, a former Labour MP and director
of the Retirement Income Reform Campaign. She said: "We are absolutely
delighted that the reform of annuities is still firmly on the agenda."
David Budworth
© Sunday Times
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