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Newspage Raw

Did you know that private-sector pension savers have access to guaranteed lifetime income?

ended 04. November 2026

Yesterday's Times headline, Private sector staff get right to a pension income for life, rather overlooks the fact that private-sector pension savers already have access to guaranteed lifetime income through open-market annuities, a Newspager has pointed out.

With annuity rates at their highest levels for years, why is the government so determined to promote Collective Defined Contribution (CDC) pensions?

Unlike annuities, CDC pensions don't actually guarantee the level of income. Payments can fall, leaving pensioners exposed to investment risk precisely when they can least afford it.

Also annuity providers are major purchasers of long-dated government gilts. If CDCs increasingly replace annuities, who will buy those gilts?

At a time when government borrowing is already under pressure, could Treasury's pension reforms inadvertently make financing the national debt more expensive?

Is this yet more unneeded government meddling, and does the government risk shooting itself in the foot?

Questions for Newspagers

  1. Do people not know that private-sector pension savers already have access to guaranteed lifetime income?
  2. What would you advise a private-sector worker?
  3. Is the Government shooting itself in the foot by pushing CDC pensions?

4 responses from the Newspage community

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Scott GallacherVerified
Director at Rowley Turton
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Private sector workers have been able to buy guaranteed lifetime incomes through annuities for decades. The suggestion that CDC pensions somehow resurrect genuine pensions is therefore misleading.

Annuities offer certainty, while drawdown offers flexibility. CDC offers another option, but crucially without guaranteed income. Pensioners could see their income cut, potentially when they can least afford it.

There is also a wider economic question. Annuity providers are major investors in long-dated government gilts, helping finance the national debt. If CDC increasingly displaces annuities, could that reduce demand for gilts and ultimately increase government borrowing costs?

CDC may have a place, but the Government should explain what additional benefits it offers consumers, rather than presenting existing retirement options as inadequate.

For most retirees, the right solution will depend on their individual circumstances, not what the Pensions Minister happens to be pushing.
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Nouran MoustafaVerified
Practice Principal & IFA at Roxton Wealth
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The government is presenting lifetime pension income as though it's a new invention. It isn't. Annuities have provided guaranteed retirement income for decades.What concerns me is the distinction between an income for life and a guaranteed amount for life.Collective Defined Contribution pensions can provide lifelong payments, but those payments can fall. Imagine retiring expecting £2,000 monthly, only to discover your income isn't as secure as you thought.I'd encourage savers to compare annuities, drawdown and collective schemes based on their circumstances, particularly their need for guaranteed income, flexibility and death benefits.The government's proposals could simplify retirement, but they shouldn't push people towards one solution.And if collective schemes reduce demand for annuities, the potential impact on gilt markets deserves scrutiny, not speculation.Retirement is too important for people to mistake a government-backed default for a government-backed guarantee.
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Harvey DhillonVerified
Founder & CEO at Zmartly
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Many savers don't know they can already buy a guaranteed income for life. The Government's own research found one in five people yet to draw on their pension pot weren't even aware they had to make a choice. So no, the Government isn't shooting itself in the foot: a default pension for life is overdue. Under the plans, it isn't expected before 2029 and can be built on annuities, with a collective scheme just one of the options. What matters is who carries the risk: with an annuity it's the insurer, in a collective scheme it's the pensioners, whose income can go down. Which option suits you is a regulated adviser's call, but before you choose, find out which one leaves the risk with you. Usually no more than a quarter of a pot is tax-free and the rest is taxed as income, so take Pension Wise guidance before cashing anything in. A guarantee nobody knows about doesn't help anyone.
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Graham NicollVerified
Financial Planner, Chartered FCSI at NCL Wealth Partners
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This feels like pension policy designed by people with gold-plated pensions who don't fully appreciate investment risk or the flexibility savers need.

Private-sector workers can already secure guaranteed lifetime income through annuities. CDC pensions don't offer that same guarantee. Income can fall when investment returns disappoint.

Professional management and pooled longevity risk offer potential benefits, but conventional DC pensions already provide investment oversight, alongside greater individual control and access to the whole annuity market and wider options / flexibility for individuals drawing a pension.

My advice? Understand your retirement income needs before choosing any product.

A pension for life sounds wonderful. But an income that can fall isn't a guarantee.