Delaying an Annuity purchase could cost you thousands
February 28, 2010
If you are aged fifty and you are thinking of cashing in your pension then experts are advising that you should act quickly. This is because on April 6 2010, the minimum age for taking your pension will rise to 55. And the process of sourcing and purchasing the right pension annuity can take up to three or four weeks. If you do not meet this deadline it could cost you thousands of pounds, because the money you will get by cashing in your pension at an earlier age could turn out to be a significant amount.
Should I choose an Inflation-Proof Annuity?
February 28, 2010
As you might expect from it’s name, an inflation proof annuity protects annuitants against the rise of inflation. Although you can build in annual increments under a standard or conventional annuity, these are not guaranteed to match the level of inflation. An inflation-proof annuity will keep its value throughout the lifetime of the annuity as it is linked to the RPI (Retail Prices Index). Any annual rises in inflation will be matched by a rise in your annual income.
What is a Conventional Annuity?
February 28, 2010
A conventional annuity, often called a ‘lifetime’ or ’standard’ annuity is in the UK, the most common pension annuity product. These types of annuity are popular because you will know from day one of the scheme just how much income you will receive each year (before deductions) for the rest of your life. This security allows annuitants to plan their lives and living standards accordingly.
Lifetime Annuity or Income Drawdown…How about a Fixed Term Annuity?
February 28, 2010
Those approaching retirement may be toying with the choice of either purchasing a lifetime annuity or instead opting for income drawdown. These tend to be two of the most popular choices when it comes to deciding on what to do with your pension pot. However, you could well find that both these options could cost you in the long run. It must be said that taking a lifetime annuity does provide stability and a guaranteed income for the rest of your retirement. Which is why around half a million annuities are bought every year in the UK.
Plans for a Variable Annuity unveiled by AXA
February 28, 2010
AXA is said to be working on the release of a new variable annuity product, according to MoneyMarketing. AXA have been planning the product since the latter part of 2007, but had to put it on hold because of the banking crisis. However, Paul Evans who works in the annuity department at AXA admits work had restarted on the product, but refused to give a time lime for release. Mr Evans said that “…we are looking at launching a variable product. The market emerged in 2007/08 and obviously the guarantees were not well priced and the providers have all gone home or fundamentally changed their products.” He said the new product should learn the valuable lessons from the past about pricing and the attractiveness of this type of product.
Government should stick to Annuity age limit
February 27, 2010
According to a industry observer, there are a series of key reasons why the government should not raise the pension annuity age limit, currently being proposed by the Conservatives. David Prosser, who recently wrote an article in the Independent, says that people should opt for an annuity purchase to avoid having to be reliant on state benefits, especially if they spend a large proportion of their retirement fund in the early years.
2010 is a bad year so far for Pension Funds
February 23, 2010
After a bumper year in 2009, pension funds have had a sluggish start to 2010, with the average fund making a loss of 1.98% in January of this year. This is due to falls in the stock market, according to website Moneyfacts.co.uk. Much of the growth in stock markets and pension funds in 2009 was driven by well performing high risk stocks. However, so far this year these have been falling, having the knock-on effect of shrinking the value of pension funds.
Career breaks hit female pension pots says Prudential Report
February 22, 2010
A recent report by pension provider the Prudential has uncovered evidence that the average female pension is £7,000 less than the equivalent male pension. According to the data, an average male this year will receive an annual pension income of £19,593, while a woman will receive just £12,169. There was also a geographical variance of up to £5,000 for both men and women, dependent on where in the country the pensioner lived. The gap between male and female pension incomes is being blamed on the fact that women can miss out on a full state pension as they often stop employment when they have children or choose part time work instead.
Do I qualify for Enhanced Annuity Rates?
February 21, 2010
Enhanced annuities pay more that conventional annuities because the annuitant (s) are deemed to either have a medical condition and/or lifestyle that will mean they have a lower than average life expectancy. This means that the pension provider has calculated that they will have to pay an income for a shorter than average period and so in return, offer higher annual payments. If you think you have a medical condition (either past or present) or lifestyle that would impair your life expectancy, then it is imperative that you explore the opportunity of an enhanced annuity as this will mean that you could increase you annual income. Unfortunately many people do not realise that they are eligible for enhanced rates and, moreover, many providers fail to make enough of an effort to inform annuitants of this possibility.
Zurich looking for a new Pension Annuity partner?
February 18, 2010
Zurich is alleged to be tendering a contract to replace Prudential for it’s “single tied annuity-outsourcing contract”, according to the website Money Marketing. The company had been sending maturing pension customers to the Pru for a number of years. Some believe that the Prudential have to pay around 3% commission for this arrangement. Royal London are another company who have been in partnership with Zurich with regard to annuities.