Decline in sales of enhanced pensions
Sales of "enhanced" annuity pensions plunged by around a third after the Government's plans to revolutionise the way people can take their retirement pots were unveiled, according to research.
UK sales of enhanced annuities, which generally give bigger payouts and are intended for people with medical problems and those in poor health, fell by 29% in the second quarter of 2014 compared with the first quarter, according to professional services company Towers Watson.
The survey of 10 providers of enhanced annuities found that £600m worth were sold in the second quarter of this year, which represents a 34% decrease against the same quarter last year.
In March, Chancellor George Osborne announced changes to the way people will be able to access their retirement income.
The plans, which formed part of the Budget, include an overhaul of the pensions taxation system, meaning that from next spring, someone aged over 55 and wanting to cash in their pension pot will be charged at their normal marginal rate, instead of the current "punitive" 55% rate.