MINISTERS are considering changing rules to prevent people nearing retirement being forced to buy an annuity, after a week in which billions of pounds was wiped off the value of pension schemes.

The FTSE 100 plummeted 24% last week. Tumbling stock markets saw total assets of the 200 largest final-salary schemes fall by £45 billion last week alone to stand at £375 billion, Aon Consulting said.

The economic downturn and slide in global stock markets has also battered the retirement savings of millions of people in other company and personal pension schemes.

The government said it would consider calls from the Conservative party to suspend pension rules that force people to cash in their pension fund and buy an annuity by age 75.

“It’s one thing, it’s a small thing, but it needs to be done and it needs desperately to be done now,” said Tory leader David Cameron.

Rosie Winterton, the pensions minister, said the government was “keen to meet opposition parties and industry experts to discuss their concerns”.

Annuity and retirement specialists said that the government should go further — abolishing the need to buy an annuity altogether.

Geoff Tresman at Punter Southall Financial Management said: “It’s quite obscene for the legislation to be so inflexible, particularly at a time when values have fallen by up to 30% and in some cases 40% over the past 12 to 18 months.

“To rub salt further into the wound, annuity rates are falling as interest rates fall and are likely to fall further over the foreseeable future.”

Here, we answer your key pension questions.

I have a final-salary pension. Will my benefits be affected?

Recent falls won’t affect your pension unless your firm goes under with a pension deficit.

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