The Chancellor’s Autumn Statement included an extension of the 2014 Budget’s pension reforms to benefit pensioners with annuities.
In the future, annuitants who die before the age of 75 will be able to leave the residual value of an annuity, especially a joint life annuity, not just to their spouses but to anyone they choose, with all payments being free of tax.
This move brings the treatment of annuities into line with the tax on other assets from next year. It will not affect most people who currently have annuities, but it will enable providers to design annuities that offer better value to people retiring after April 2015.