While not as earth-shaking as last year's historic gamechanger, yesterday's Budget included two important moves – the creation of a secondary annuity market and lowering the lifetime allowance to £1m from £1.25m.

This year's Budget was anticipated defensively following the sweeping reforms that were sprung on the industry last year. 

But unlike in 2014, the two main changes appeared in the press before the big day. On Monday, The Sun revealed George Osborne's intention to co-opt the plans laid out by both the Liberal Democrats and Labour to reduce the lifetime allowance.

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This year's Budget was anticipated defensively following the sweeping reforms that were sprung on the industry last year. 

But unlike in 2014, the two main changes appeared in the press before the big day. On Monday, The Sun revealed George Osborne's intention to co-opt the plans laid out by both the Liberal Democrats and Labour to reduce the lifetime allowance.

However, this raised questions over the level of retirement income people could hope for, and brought forth the discrepancy between the end incomes of those with defined benefit versus those with defined contribution pots.

Trading annuities

The creation of a secondary annuity market will allow annuity holders to sell it in exchange for a cash lump sum. This policy was floated over the weekend but has raised some concerns across the pensions industry.

But on the positive, the consultation on the proposals pointed to several key reasons why retirees may wish to cash in...

Source: HMRC

Opposition leader Ed Miliband was quick to doubt the speed at which those looking to sell their annuities could get access to appropriate advice.

One thing is for sure, the efforts to protect members will have to be ratcheted up a further notch or two should these proposals be brought to bear next year. 

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