The removal of the requirement to annuitise by age 75 could encourage people to remain in drawdown even when it becomes damaging, MGM Advantage and Intelligent Pensions (IP) warned.
The age 75 rule was scrapped last year and replaced with an interim age of 77, before being completely removed in April this year. Investors can now use capped or flexible drawdown indefinitely. However, annuity provider MGM Advantage and retirement consultancy for IFAs IP warned investors could stay in drawdown too long and miss out on valuable income from mortality cross-subsidisation. MGM and IP said a 70-year-old man who lives for 20 years in drawdown with a pension fund of £100,000 could miss out on £70,000 he would get if he had annuitised. This is because within some annuiti...
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