British pensions commentator and former Lib Dem MP
The government has unveiled a plan to default retirees into an income that lasts a lifetime, applying to around 17 million workers with defined contribution pensions. Savers will still have choice, but a simple, inflation-linked option will be offered as the default. The policy is part of Labour’s pension overhaul and comes amid concerns that many savers withdraw their pots early.
The state pension is set to outpace the personal allowance next year, meaning some pension income will be taxable. The government has promised an exemption for those relying solely on the state pension, but deferrals with increments may still incur higher tax bills. 12 million pensioners may see income rises up to 470, with some facing extra tax as the triple lock drives up payments.