Chances of drawdown option being withdrawn by a future government?

WobblyDog

I'm 48 and currently salary-sacrificing a large chunk of my salary into a DC pension, so that I can retire at 55 if I want to. I have no spouse or dependents. I'm planning to have enough money in the pension that I can safely opt for draw-down, and probably have a substantial amount of money to pass to other relatives when I die.

I'm a bit worried that a future government might withdraw the drawdown option before I retire, and force me to buy an annuity which my non-dependent relatives would not benefit from after I die.

What do people think are the chances of that happening?

Linton

Who knows what a government may do. However I cant think of any circumstances where there would be any gain for anyone, including the government, by removing drawdown and forcing people to buy annuities. Far more likely changes would involve tax rates, tax relief, limits and allowances. So it's not a risk I would worry about.

AnotherJoe

The chances are as close to zero as you could get..

JezR

Raising the age from 55 is a possibility.

kidmugsy

A greater risk might be that a government stop the SS nonsense. So use it while it's still available.

Triumph13

I'd agree that there is practically zero chance of them stopping drawdown. There is probably a reasonable chance they might one day limit it again if too many people screw up managing it and calls for a return of the nanny state gain traction, but that would be a return to a 'you can't draw more than x%' situation, not 'you must but an annuity'.
I'd say there is a very high chance of a future labour govt taking away the complete inheritance tax exemption.

AnotherJoe

JezR wrote: »

Raising the age from 55 is a possibility.

Agreed but most likely tied to retirement age and again most likely with 10 year notice so the OP should be OK for 55.

Thrugelmir

JezR wrote: »

Raising the age from 55 is a possibility.

Rises to 57 in 2028.

badmemory

Ask yourself if the gov would want to be re-elected, neither will they remove all the triple lock on state pensions but will probably go down to double. Although of course it is always possible that this gov will do something similar to avoid being re-elected so that Labour can take the bulk of the carp from Brexit.

dunstonh

Chances of drawdown option being withdrawn by a future government?

Drawdown is not a new option. It has been tweaked a handful of times but in each case, it increased access. It has existed through Labour and Conservative Govts.

I'm a bit worried that a future government might withdraw the drawdown option before I retire, and force me to buy an annuity which my non-dependent relatives would not benefit from after I die.

1 - Why would they do that? Nothing to gain for the Govt.
2 - why do you think an annuity doesnt have death benefits?

redux

Triumph13 wrote: »

I'd say there is a very high chance of a future labour govt taking away the complete inheritance tax exemption.

That would be a little odd, considering that the Labour government made 10 or 12 increases, and then George Osborne froze out any increases for longer than any period since 1945.

I wonder how many people would have predicted that 20 years ago.