THE EFFECT OF THE REFORMS TO COMPULSION ON ANNUITY DEMAND

This paper investigates the effect of recent regulatory changes to the compulsory annuitisation of tax-privileged pension savings, on the demand for annuities and other retirement products. We find that the demand for annuities has fallen by almost 75 per cent from its peak in 2012, and the demand f...

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Bibliographic Details
Published in:National Institute economic review 2016-08, Vol.237 (237), p.R47-R54
Main Authors: Cannon, Edmund, Tonks, Ian, Yuille, Rob
Format: Article
Language:English
Subjects:
Age
Annuities
Asset income
Cash
Compulsions
Income taxes
Laws, regulations and rules
Old age benefits
Pension funds
Pension plans
Pensions
Private pensions
Reforms
Retirement
Savings
Supply & demand
Taxation
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Summary:This paper investigates the effect of recent regulatory changes to the compulsory annuitisation of tax-privileged pension savings, on the demand for annuities and other retirement products. We find that the demand for annuities has fallen by almost 75 per cent from its peak in 2012, and the demand for income drawdown products has increased. There is some evidence that people at younger ages and with smaller pension pots are choosing not to annuitise, and hence the average size of an annuity purchase has increased.
ISSN:0027-9501
1741-3036
DOI:10.1177/002795011623700116