§ Mr. Flight
To ask the Chancellor of the Exchequer if he will set out the calculation underlying the statement in the Red Book 2001, page 95, paragraph 5.67, on the costs of undertaking annuity reform; and if he will make a statement.
§ Miss Melanie Johnson
Relaxing the existing requirement to purchase an annuity would provide an incentive for some to use pension schemes for purposes other than providing a secure income throughout retirement. Costs will vary depending on the nature of any reforms, including what level of income must first be secured and what tax charge is applied to withdrawals above that level. Proposals for tax-free withdrawals could cost billions of pounds a year in lost income tax and extra tax relief.