The British government faces a potential legal challenge over annuities, after a pensioner filed a writ claiming that current legislation contravenes the European Convention on Human Rights.
Joe Singer, a pensioner aged 75 has refused to take out an annuity and his claim is based on the premise that the current compulsory annuity purchase legislation violates his right to spend the cash as he sees fit. Additionally, he also says that the law discriminates against him because of his age.
Currently, anyone with a pension is compelled to buy an annuity by the age of 75. The pensioner has hired UK Prime Minister Tony Blair’s wife, Cherie Booth QC of Matrix Chambers, for the case.
Matrix Chambers has confirmed that Booth has taken on Singer's case, as well as a number of other test cases. If Singer’s case is successful one possible outcome could be the relaxation, or even the scrapping, of compulsory annuities. Additionally, pensioners could gain greater flexibility in their investment options.
Another area where annuities have met hostility in the UK, is over the ownership of remaining funds. Currently, when an annuity holder dies, any money left in the pot goes to the insurance company, rather than the holder's survivors.
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