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Pensions Regulator misses an opportunity to ensure DC trustees address annuity inadequacy

November 22, 2013 Ros Altmann Comments 0 Comment

22 November 2013 Another missed opportunity to address the inadequacies of annuities The Pensions Regulator Code of Practice for DC scheme trustees suggests independent advice or using an annuity broker are of equal value to members But annuity brokers provide no advice, won’t explain benefits of not buying, don’t ensure right product or best rate and still charge fees Independent financial advice should ensure members optimise the value of their pension fund with right timing, right product and best rate…

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Annuity providers keep £1billion a year as widows left penniless

November 18, 2013 Ros Altmann Comments 9 comments

18 November 2013 Widows penniless while insurers pocket £1billion a year from husbands’ pension funds Companies make huge profits as customers buy wrong annuity because they don’t understand complex terms Focus just on ‘shopping around’ or ‘best rate’ is not enough, need right product first Channel 4 Dispatches reveals real life example of this failure and insurer agrees to change annuity terms The UK annuity market is failing its customers. An annuity is a product sold by insurers who…

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Rates are too low as economy booming – Forward Guidance looking backwards

November 14, 2013 Ros Altmann Comments 0 Comment

14 November 2013 Bank of England repeating past mistakes – rates should start rising as UK growth set to surge Mortgage borrowers enticed into large loans at low rates as loan to income ratio returns to pre-crisis peak Keeping rates at 0.5% is about politics, not economics Take the squeeze off pensions and savers – and encourage companies to spend their £200bn cash pile UK economy is booming – but BoE looking backwards instead of forwards: The Bank of England has finally realised…

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Auto-enrolment focus on pension fund charges misses the bigger picture

November 11, 2013 Ros Altmann Comments 2 comments

11 November 2013 There are no controls on charges people forced to pay when buying their actual pension Far more money can be lost on annuitisation than saving 0.25% in fees 0.25% charge on £30,000 fund is £75pa but customers lose £600-£1000 when buying their annuity at retirement with no advice Auto-enrolment needs to ensure pensions are good value: There has been significant debate about capping fees and charges on auto-enrolment pension funds and estimates that people are losing chunks…

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Defined Ambition Pensions

November 7, 2013 Ros Altmann Comments 0 Comment

7 November 2013 Government trying to offset decline of Defined Benefit pensions with Defined Ambition DA aims to be a more flexible half-way house between DB and DC – but with hard guarantees Government trying to find ways to offset falling state pensions But guaranteed pensions in private sector are still risky – while public sector remains protected Demise of private sector final salary schemes reduces future private sector pensions: The UK once had a private pension saving system that was the…

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Can we really justify denying pension resettlement rights to our loyal armed forces?

November 4, 2013 Ros Altmann Comments 1 comment

Former Defence Minister Challenges Government on Armed Forces Redundancy Injustice Betrayal of Military Covenant is a major Breach of Trust for our loyal troops On Thursday 31st October, at 2.30pm, former Labour Defence Minister, Lord Touhig, called an emergency debate in the House of Lords, to highlight the plight of armed forces personnel who feel betrayed by the Government as it has refused to pay them the pension payments they were promised when making them compulsorily redundant. You can…

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Comment on pension charges cap of 0.75%

October 29, 2013 Ros Altmann Comments 2 comments

29 October 2013 In today’s Pensions Bill debate, Steve Webb anounced his ‘full frontal assault’ on pension charges. Here are my thoughts: It is of course right that people need good value pension schemes to save into with auto enrolment, but it is also important that we consider the losses they can sustain when buying an annuity. Buying the wrong annuity can be even more damaging to people’s pension funds than being in a higher charging scheme. There are no…

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Don’t lecture universities on their pension scheme

October 25, 2013 Ros Altmann Comments 3 comments

25 October 2013 Universities Pension Scheme scaremongering is overdone Classic example of damage to pensions from QE USS is not a closed scheme, so it is unfair to compare it with most other UK schemes Its funding position is being well managed and it should not be panicked by exceptional interest rate environment USS scare stories overdone: Scare stories today about the black hole in the USS Pension Fund (Universities Superannuation Scheme) are overly negative. This huge pension scheme, with…

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Time for change: Make pensions fit for 21st Century retirement

October 14, 2013 Ros Altmann Comments 1 comment

14 October 2013 TIME FOR CHANGE: Rethinking pensions and retirement Pension options not fit for the future as ‘low risk’ investments have become more risky and retirement becomes a process not an event Auto-enrolment pension funds not fit for the future: Retirement is changing, pensions need to change too. As auto-enrolment ensures millions of people are about to start saving in pension schemes at work, it is important to make future pensions fit future lifestyles. There is a real danger…

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Equitable Life saga drags on as Compensation Scheme extended

October 9, 2013 Ros Altmann Comments 1 comment

9 October 2013 Good that there is more time to trace victims, shame it’s taken so long so far! Government should be commended for continuing its commitment to help those affected The Government deserves some praise for taking the decision to extend the Equitable Life Compensation Scheme deadline and allow more time to trace the victims. Around one million people may be eligible for compensation, but around 400,000 of them have not yet been traced. It is not clear why…

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