Sipp and Ssas provider Hornbuckle Mitchell, an IFP sponsor, says it would welcome the HMRC introducing a "cap and collar" on Government Actuary rates to provide better retirement projections.

Stewart Dick, head of sales of Hornbuckle Mitchell, said:  "We would welcome the HMRC introducing a cap and collar on the Government Actuary Department's rates for the purposes of drawdown calculations. This would introduce some certainty into retirement projections so that pension investors know within what limits their income would fluctuate.

"At the moment, GAD rates are at an all-time low due to quantitative easing and Solvency II, which are having the effect of pushing gilt prices up and yields down. This is impacting unfairly on people in drawdown who are seeing their incomes squeezed due to these unprecedented government and regulatory measures.

"If the Government were to allow the industry to use a collar of around 3-4% of GAD and a cap of around 5-6%, advisers and their clients could plan ahead with some certainty and have a level playing field when comparing drawdown with annuities. The actual levels used could be open for consultation but I think the concept is a valid one.

"For instance, for a 65 year old man with a £200,000 fund in August 1997, when the gilt yield was 7%, maximum income was £21,360 (including 120% of GAD). By contrast, on 1 April 2012, with the gilt yield at 2.75%, the same individual was entitled to maximum income of only £11,600 - a difference of nearly £10,000.

If the HMRC allowed a collar of 3% and a cap of 5%, the difference in income could be narrowed to less than £3,000, because a collar of 3% would generate maximum income of £11,800pa and a cap of 5% would give maximum income of £14,600pa. This would give investors and their advisers a much greater degree of certainty."