The consequences of not having to buy an annuity

In his Budget speech on 19 March 2014, the UK Chancellor announced the biggest change in pension policy in 100 years: ‘Pensioners will have complete freedom to draw down as much or as little of their pension pot as they want, any time they want. No caps. No drawdown limit. Let me be clear. No one will have to buy an annuity … People who have worked hard and saved hard all their lives, and done the right thing, should be trusted with their own finances'. This paper analyses the consequences of this change