Govt announces new scheme for pre-2010 retirees

The Government has announced that anybody retiring before the end of next year has the option of buying an annuity now or holding off for two years.

An annuity is a contract with a financial institution that provides periodic payments that could provide additional income to a pension.

The initiative is being introduced because of the currently volatile state of the stock market.

Social and Family Affairs Minister Mary Hanafin said this afternoon that she accepts the market could go down further in the next two years:

“There's always that danger - the pensions board will be issuing guidelines to people to enable them to make an informed decision on it,” the minister said.

“The pressure has been from people who feel that they don't have a choice at the moment, so by giving the choice people can either take their lump sum and buy their annuity now and on retirement, or they can take their lump sum and not purchase their annuity for up to two years.”