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

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    pensionsandsavings.com

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    Tag: annuities

    Annuities – now FCA Consumer Panel calls for urgent reform

    Annuities – now FCA Consumer Panel calls for urgent reform

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    9 December 2013 Financial Services Consumer Panel slams annuity market Calls for urgent regulatory reform – this is long overdue Fears that annuities don’t offer value for money and insurers making excessive profits Annuity consumers need better protection:  A report just released by the Financial Services Consumer Panel (FSCP) calls for urgent regulatory reform of annuity sales, in order to protect consumers.  http://www.ifaonline.co.uk/ifaonline/news/2317942/fscp-demands-change-in-the-non-advised-annuities-market The FSCP is the consumer body of the FCA – the financial services regulator – and its…

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

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

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    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

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

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

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

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    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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    Why everyone should consider income drawdown before buying an annuity

    Why everyone should consider income drawdown before buying an annuity

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    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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    To buy or not to buy – annuities are a gamble

    To buy or not to buy – annuities are a gamble

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    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

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      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

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    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

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    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

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    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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