A series of proposals have been published by the Association of British Insurers (ABI) in a bid to give people more options for taking income from Defined Contribution (DC) pensions.
The paper, entitled Time for Change: Seven proposals to improve DC pension benefits in retirement, outlined policy proposals to remove existing restrictions and enable people to get "maximum value" from their pension savings.
Recommendations in the report include raising the current age requirement for buying an annuity from 75 to 80, encouraging the development of value protection annuities, and addressing the issue of stranded pots by "harmonising" rules for occupational and contract-based DC pensions.
The ABI also proposed increasing the income allowance for Alternatively Secured Pensions and the introduction plans to encourage married and partnered couples to consider their joint retirement income needs.
Maggie Craig, Acting Director General of the ABI, said: "The UK pensions landscape is undergoing huge change, with the numbers drawing benefits from DC pensions savings in 2010 set to exceed 500,000.
"The good news is that these people can expect to live longer.
However, this improvement brings new pressures, which means the current rules and regulations are not fit for purpose."
Worries over the stability of pensions in the UK could lead to an increase in the popularity of additional retirement funding, such as equity release schemes.
Such plans allow homeowners to increase their incomes with funds drawn from the value of their property assets.
