East Renfrewshire MP, Paul Masterton is leading a national campaign to urge the Government to look again at the rules that unfairly trap 5 million retirees. The ‘Your Pension Your Choice’ campaign is calling for all retirees, no matter when they retired, to have the same freedoms when it comes to how they access their retirement income.
For the 5 million pensioners that retired before April 2015, they do not have the same pension freedoms as those who retired after; they were forced to buy an annuity – which is an insurance product that pays out a monthly income to retirees for the rest of their lives. Many people are stuck with very small annuities, some paying out as little as £1 a month.
In 2015, the Government introduced the ground-breaking ‘pensions freedom and choice’ reforms, giving those who retired after April 2015 more control over how to access their retirement income, shaping it to meet their own needs. As well being able to purchase an annuity, retirees can now invest in a drawdown account, cash out their pension pot or combine these various options.
But despite this positive step, the pension freedoms are not available to people that retired before April 2015, despite a previous promise to do just that.
It recently said it has “no plans to review this decision”.
The Your Pension Your Choice campaign aims to draw attention to this injustice and encourage the Government to reverse its decision so that the forgotten five million are given full pension freedoms.
To mark the start of the campaign, a Change petition has been launched to gather public support, while a cross-party group of MPs led by Scottish Conservative MP, Paul Masterton, a former pensions lawyer, has launched an Early Day Motion in Parliament.
The campaign’s website, www.yourpensionyourchoice.co.uk, is urging the public to sign the petition, write to their local MP and share their stories.
Commenting, Paul Masterton MP for East Renfrewshire said:
“Freedom and choice was a revolutionary pension policy which allowed individuals greater flexibility to tailor how they received retirement income to better fit their circumstances.
“But because the Government has backtracked on a promise to extend that ability to individuals who retired before the changes came into place, more than 5 million people are losing out on the ability to access their pension pots in the way they please.
“For most people who retired before April 2015, an annuity will remain the most sensible form of retirement income, but there are people across the UK who are now stuck with very small, poor value annuities which aren’t their main retirement income and provide no meaningful benefit. I firmly believe the Government needs to look again at whether we can sensibly and safely extend the freedom and choice that people retiring now enjoy to those who have missed out, simply because of when they chose to retire.”