Assessing the impact

One key element that cannot be factored into a financial plan is the exact date of death – which is probably just as well! This necessitates the need for assumptions about life expectancy in order to arrive at some idea of how long income will be required. Before 1995, when annuity purchase was pretty much compulsory, this was less of an issue as annuities would pay out for life, however long that may be. Following pensions simplification, annuity purchase was no longer compulsory but the other options at age 75 meant that it was still used by most. From April 2011 the need to annu...