He made the announcement of the transformation to pensions in the budget in March, but had promised to set out more details of how people would be able to access their savings.
Speaking on ITV's Good Morning Britain on Monday, Osborne said: "We've reached a major milestone today in these reforms, which are going to come in and give people who have worked hard and saved hard all their lives greater access to their pensions and their pension pots in retirement … We're saying [these options are] going to be available to many more people than we previously said it could be, so we're adding in people who've got funded defined benefit schemes … [and] we are today saying there will be free, impartial guidance for anyone who wants to use this service, delivered by the government but using people like Citizen's Advice and Age
The Treasury stressed that everyone should be offered free financial advice to fully understand the implications. Ministers said such advice would be funded by a levy on the financial sector and would be impartial – not from the pension provider.
The guidance guarantee is to start from
Currently, pensioners must decide at retirement whether to take a tax-free lump sum of up to 25% of the value of their pension pot. The Treasury is instead to allow cash sums to be taken out later to meet sudden needs as they arise.
Ministers are also announcing a reform of annuities so that they can continue to pay out after death, to avoid all income being lost to the family of a deceased policyholder. Currently, income from annuities is guaranteed for a maximum of only 10 years.
The 10-year cap is to be dropped and the annuity provider would be able to pay out for longer, although income rates would depend on the length of the guarantee.
"These new freedoms should make pensions more popular, ensure more people save for retirement and encourage them to seek expert financial advice."
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