§ Mr. BradyTo ask the Prime Minister, pursuant to his oral answer on 14 March 2001,Official Report, column 1011, if he will estimate the cost to the Exchequer of giving pensioners the freedom to choose to invest in products other than an annuity. [154324]
§ The Prime Minister[holding answer 19 March 2001]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.