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2015考研英语题源阅读:Retirement income
You can't always get what you want
THE British government announced this year that it was offering "freedom" for retirees. No longer did they have to use their pension pot to buy an annuity, a guaranteed income for life. Instead they could take the money as cash and spend it (subject to a tax charge on all but the first 25%) or squirrel it away and pass it to their heirs. As I argued at the time, this was a very dubious reform; pensions are given very generous tax breaks (the cost of which is £35 billion a year) to encourage workers to save so they do not become dependent on the state, not so they can pass money to their heirs.
The unpopularity of annuities may also be due to a degree of financial illiteracy, as a survey by NEST, the pension scheme behind auto-enrolment, shows. Asked for their main priorties for retirement savings, those polled favoured
1) Income that grows in line with inflation
2) Security of a guaranteed income that is fixed until you die; and
3) Protection from falls in the value of the fund due to stockmarket movements
Those three qualities are the hallmark of a product that is already on the market - inflation-linked annuities. Hardly anybody buys them. Why? Because guarantees and inflation-linking are expensive. A 65-year old with a £100,0...