• PENSIONSANDSAVINGS.COM

    From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

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    Category: Annuities and Income Drawdown

    Why everyone should consider income drawdown before buying an annuity

    Why everyone should consider income drawdown before buying an annuity

    What to do with your pension pot as you approach retirement is an important issue to explore. Most people don’t realise they don’t have to buy an annuity: All too often, people just assume they have to annuitise, and never engage with the important alternative options available to them. Annuities are irreversible:  Once you have bought an annuity, you can’t change it. You will never have a second chance. Annuities won’t protect you against serious retirement risks: It’s like putting…

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    Potential good news for pensioners as gilt yields rise

    Potential good news for pensioners as gilt yields rise

    17 September 2013 Rising gilt yields and revised regulations could increase pensioner incomes from income drawdown by 50% But inflexibility prevents pensioners from accessing more of their money By the time they are allowed to, the opportunity may be lost Need to make drawdown more flexible and allow for ill-health  Recent rises in gilt yields and Treasury rule changes for income drawdown mean people could now take much more money out of their pension funds than last year.  This should…

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    To buy or not to buy – annuities are a gamble

    To buy or not to buy – annuities are a gamble

    Yes, not buying an annuity is a gamble, as is buying one! The attempts to defend annuity purchase are rather too simplistic.  Of course it is the case that not buying an annuity is a gamble, but what people do not yet realise is that buying one is also a gamble.  Customers need to understand that any decision around annuities is risky.  Currently, the industry and providers and even trustees seem to believe that buying an annuity is the ‘safe’,…

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    The crazy world of annuities – hiring a chauffeur-driven limousine cheaper than finding your way by bus

    The crazy world of annuities – hiring a chauffeur-driven limousine cheaper than finding your way by bus

      Do you understand how annuities work? Millions will be auto-enrolled into a system that is not fit for purpose The Government is encouraging millions of workers to save in a pension scheme to improve their retirement income.  If you are a worker earning above the tax threshold you will be automatically enrolled into company pensions and (assuming you do not opt out) you will be paying contributions for many years to build up a retirement fund.  Most new auto-enrolment…

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    10 things an annuity will guarantee you

    10 things an annuity will guarantee you

    20 August 2013 1. A single life level  annuity guarantees that your pension fund will not ‘run out of money’ and the income you receive from your pension fund will be fixed now for the rest of your life.  You know what you will get each year. 2. It guarantees that you will never get a higher income than this even if annuity rates rise in future. 3. It guarantees that your income has no protection against inflation, so your…

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    Annuity pricing bonanza for providers

    Annuity pricing bonanza for providers

    13 August 2013 There is no control on annuity pricing, profits or risk margins People buying without an adviser at risk of poorest rates but don’t realise Insurers may be pocketing £100m each year from selling poorest value products As we move towards a world of defined contribution pensions, more and more people will be reaching retirement and having to find the best way to release money from their pension savings.  If we want auto-enrolment to work well, we need…

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    10 reasons to think carefully before buying an annuity in your 60s

    10 reasons to think carefully before buying an annuity in your 60s

    The annuity you will be offered as standard by most pension companies will be a single life level annuity.  It usually offers the highest starting income (although if you have some health conditions you could get more with a different type) but this kind of annuity has many drawbacks which you may not understand.  Therefore, it is vital to think carefully before buying an annuity.  The best thing you can do is to get independent financial advice to help you…

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    Buying annuities is a big gamble

    Buying annuities is a big gamble

    12 August 2013 Buying an annuity is a gamble which can lose all your money – the income is ‘safe’, but your capital isn’t! Regulators not ensuring consumers understand the risks of annuities Defined contribution pension trustees must do more to look after retirees – explain benefits of ‘do nothing’ option for small pots Annuity purchase is a big gamble: Buying a standard annuity in your 60s, which is a relatively young age, is gambling on you staying fit and…

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    250,000 widows and widowers at risk from annuities

    250,000 widows and widowers at risk from annuities

    I’m doing quite a bit of work on annuities at the moment and just thought you might be interested in seeing some of my conclusions.  The current annuity reform agenda benefits the brokers and providers, not the poorly-informed consumers.  I’m particularly worried about future widows left with nothing because their husbands did not realise the implications of annuities. What do you think?  Do leave a comment below. 250,000 widows or widowers at risk in annuity market each year Annuity buyers…

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