Pensions shake-up: George Osborne mulls further change to annuity rules

Chancellor George Osborne is considering including a further shake-up of pensions rules in his crucial pre-election Budget next week, to allow pensioners to sell their existing annuities for cash.

From next month those over 55 years old will be able to cash in their pension pot instead of buying an annuity to be paid out on a monthly basis.

However, some six million pensioners who had bought an annuity previously were not included in the new system, that the chancellor announced in his previous budget.

Lib Dem pensions minister Steve Webb is known to be in favour of giving pensioners greater freedoms with their own savings. He was the architect of last year’s changes, and has pushed Osborne in public to bring in the further changes fast.

Ros Altman, an independent pensions expert, commented: “Someone with a £5,000 pension fund who bought an annuity at age 60 might have less than £5 a week for life, whereas having a few thousand pounds straight away could make a real difference to their lives.”