George Osborne's pension reforms based on 'highly uncertain assumptions'

Chancellor of the Exchequer George Osborne lays a block during a visit to a Barratt Homes building site. Credit: Darren Staples/PA Wire

Video report from ITV News Business Editor Joel Hills

The pension reforms announced in the Budget yesterday are a risk and based on "highly uncertain assumptions", according to an influential think tank.

Chancellor George Osborne's pension changes are being scrutinised today and the Institute of Fiscal Studies has warned that removing the need for annuities could lead to a market failure.

The first annuity was issued in Britain just over 300 years ago and pension providers have always been able to rely on the fact that people have had to swap their pension pot for a guaranteed income for life.

However, that is all about to change after the Government's announcement.

The boss of Partnership, one of the largest annuity providers in Britain, has warned that the changes have had mixed success in other parts of the world.

Steve Groves, Partnership chief executive, talking to ITV News. Credit: ITV News

The Government has also started enrolling Britons in company pension schemes in a bid to ensure that people save enough money for retirement.

At Argos, nine in 10 employees have opted to stay in the company scheme but one employee was uncertain if she would spend her pension wisely, she told ITV News:

Sophie said she probably would not spend her pension pot wisely. Credit: ITV News

The Chancellor said the changes are about trusting people to manage their own finances in retirement.