U.K. Government Helps with Retirement Planning

Last update on: Feb 02 2017

The U.K. government recently liberalized national pension rules to allow retirees to take their benefits in a lump sum instead of being required to take them as a life annuity. The latest move they’re considering is to tell people how long they are likely to live and will need their nest eggs to last. The state doesn’t want people to run out of money and turn to public support. So, it’s addressing the well-known fact that most people underestimate longevity by a substantial amount. Details are here.

The objective, he said, was simply to “help people to make the right choices.”

The new retirement rules include free face-to-face consultations with a pension adviser provided by the private pension providers themselves. The government is considering whether guidance on life expectancy should be included in these consultations, amid concerns that the new rules on the timing of claiming retirement funds could result in some retirees’ running out of money. “People tend to underestimate how long they’re likely to live,” Mr. Webb said.

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