Warning for value guaranteed annuities after rule change

The products pay out all future benefits to the beneficiary of the policyholder on death, in an effort to provide better value for money than annuity products where the policy dies with the pensioner. However, O'Dwyer says the death benefit taxes imposed by the new draft legislation could cause problems for these types of annuities. "The only part I would have like to have seen differently is the 55% tax on death, which will grab back the 40% tax relief people initially got," O'Dwyer says. "This could be a particular problem with value guaranteed annuities, as people will pay a mas...