Why protected rights simplification heightens need for advice

Last week saw the end of contracting-out from defined contribution (DC) pensions and the abolition of rules governing how protected rights can be used. Protected rights – the specific benefits built up while pension savers contracted-out of SERPS, and the state second pension – can make up a significant chunk of a saver’s pension pot. The government has decided to remove constraints on how they are spent as part of its drive to simplify pensions. One result of the change is the removal of the requirement to buy an annuity with a 50% spousal income from protected rights. Prudential ...