Pensions: Alternatively Secured Pensions

Baroness Noakes
asked Her Majesty's Government:

Whether they have any plans to restrict the availability of the alternatively secured pension provisions to particular groups of individuals. [HL7417]

Lord McKenzie of Luton
The longstanding position of successive Governments is that pension assets should be converted into a secure income in retirement by age 75. For most people, an annuity or scheme pension is the best means by which they can do this. The new pension rules introduce an additional option for achieving this—an alternatively secured pension (ASP). As the Government made clear during the development of the new pension tax provisions, ASPs are specifically designed for those who have a principled religious objection to annuitisation.

It has become clear, however, that some advisers are intending to use the ASP provisions for a much wider purpose to enable individuals to pass on tax-privileged retirement savings to their dependants rather than to provide a pension in retirement. In order to prevent this, the Government are examining how best to restrict ASPs to their original limited purpose.