Morning Line: Most people will still have to buy an annuity

The new rules seem broadly sensible, hitting the right balance. However, I am at a loss to understand why unused funds should be taxed at 55% on death. I received relief at 40% on my contributions and given that there has to be some incentive to save, why not tax the residue at 40%?

The annuity providers haven taken advantage of the compulsion to buy a pension annuity. Just take the rate quoted of 6%pa for a 65 year old male, you would have to live over 16 years which is about a good life expectance (to age 81: 100% divided by 6%pa is 16.66 years.) just to get your fund back and this is before any tax due and at 81 you havent received a penny in interest over that time. You need to live at least another 16 years (97) to receive a simple 3%pa yield (before tax) on your fund since age 65. The compulsion just has to go and if you income is above state benefit levels you should be able to take the whole fund in cash from age 65

Anonymous 1 - In answer to your query regarding the 55% tax - This equates to a repayment of your 40pc tax relief adjusted for the fact that you will most likely take 25pc of your fund tax free on retirement.

However, one might argue that the 55% tax will unfairly penalise people who only received basic rate tax relief when they were accumulating their fund

Its about time the government began to see sense on annuities and pensions. Annuities are an appalling ripoff as Alan Stern says above. SIPPS are not much better - look at the FTSE today at 5140 - I've lost over 20k on my SIPP value in just three months whereas I could have taken it as cash and not lost a penny. Why do I have to keep risking my life saving on this crazy stock market?

Lets put some pressure on to enable all pensioners to get ALL of their money out of their pots - but we also need to kill off the absurdities of Civil Service/BBC severances and pension pots that could make Cresus blush. Their pots need drastically reducing and to hell with the howls of anguish! None of them has contributed anything like a £1m during their working lives and they are not worth their absurdly inflated salaries either.

The comments by Lorna Bourke do not refer to the effects of inflation. One might hopefully assume that the Pension Credit guarantee level and all State benefits will in future be increased at the same rate for inflation. Thus for anyone wishing to withdraw cash from their pension pot, the shortfall between the Pension Credit level and their State benefits entitlement must be covered by an annuity which will have to take into account future estimated inflation and their life expectancy. Considering the apalling annuity rates currently available as quoted above and the uncertainty attaching to the two criteria this is likely to cost a substantial sum which will have to come out of the pension pot before any right to withdrawal. It all points to the fact that only the larger pension funds will benefit.

The tax rate on death (55%) is another rip off by the govt.

They require a basic income to avoid an annuity after 75. Prior to 75 the rate of taxation on death is 35%. Is this not in breach of current legislation, ageism?

If you are a SIPP holder, the SIPP Provider wants a goodly slice annually for the privilege of being your provider, depending on how much you do, minimum £25 just to write you out or sign a cheque for your own money, earned, never mind other correspondence they send or forward, and they want to be paid for that as well. On top of that I will lay odds that they are getting a backhander (in some shape or form) from the banks that the income goes into.

A little easier, but still a massive injustice and inequitable for people who have saved in SIPPs. A lot more needs to be done.

I thin 40% tax would be more reasonable and fair but the amount left from the pensio fund after paying 40% tax would have to be added to the estate and then be additionally taxed at 40% for anything in the estate over £325,000.

I disagree, that is as bad as Brown's 82% tax. One lot of tax.

Let us not forget that for many SIPPs and pensioners, Brown stole half the fund starting with his raid, which continues today under the Tories, by taking tax on the dividends that would accrue to the pension finds.

That tax is chargeable on the dividends accruing to pension funds and then there is tax again when the pensioner draws down the income.

Chancellor's motto, heads I win, tails you lose, I am not a mathematician, but does not that mean pensioners with SIPPs are paying about 35%?

If you have a dividend in your name you at least get credit for the tax paid.

Please tell me I have it wrong.

I am still waiting for some sensible, simple and fair pensions legislation.

A retiring citizen should be obliged to show an reasonably safe income above state benefit level from any source .After that he shold be allowed to do what he likes with it. Then no inheritance tax for estates up tp L10 million and 90% duty on the remainder.

Why 90% inheritance tax you may ask? Because he owes it to his country, to the society that sustained him and to those who gave rheir life defending him. L10miln will be enough to set up his children up nicely, it is the evil there off .

Miss Burke you gave us the figures and it is clear even to the biggest idiot that the proposed changes will benefit the rich and not the cannon fodder. It was ever thus. You did not need to bring in another person to give us his opinion but ofcourse the real intension of your article was advertisement. As usual .

Let me get this right we are sold a pension plan an told that we will have a good retirement fund. then after a few years the fund is sold which we can do nothing about. Firstly the annual bonuses are reduced, but there is a hint that the terminal bonus will compensate. Next we are told that there will be no terminal bonus. We are then told that we have no option but to buy an annuity where someone will get a big bonus. We then have to live into our Hundreds to even get our money back. And to think that governments of all parties let these crooks get away with it.