The death of annuities is premature but the lifetime allowance on pensions must be scrapped, delegates heard at the Association of Member-Directed Pension Schemes (AMPS)'s annual conference.
Intelligent Pensions managing director Steve Patterson called for a major rethink on the use of the lifetime allowance as the pension system would be "far simpler" and would not penalise those who have saved for retirement.
Patterson said: "It's not just the private sector so called ‘fat cats' that are caught by the lifetime allowance, it is also doctors, dentists, vets and other professions who will be hit hard but won't necessarily be aware of it. It's an insidious back handed tax charge on people who made the effort to plan for their future needs and will backfire on the government."
In a straw poll, the majority of delegates at the AMPS conference (77%) agreed the government should abolish the lifetime allowance.
The lifetime allowance - the maximum amount of pension saving you can build up over your life that benefits from tax relief - is currently £1.25m. Previously it was £1.5m.
Patterson added: "Much has been said about the death of annuities since the Budget. While the link between retirement and annuitisation is broken annuities still have their place, it is no longer whether to buy an annuity, it is when. An annuity is ultimately still the only way to provide real security and peace of mind in later life."
He added: "The guidance guarantee needs to be very carefully thought through and for consumers to understand the ‘at' retirement decisions and post-retirement risks needs a great deal of explanation.
"It needs more than just words and advisers are far better placed to explain the issues and consequences.
"Technology and robust cash flow modelling makes it much easier to do and allows those approaching retirement to see into the future. Looking at what if scenarios. It's like satellite navigation in cars and we've all seen how much that helps on a long and uncertain journey."
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