Retirement Puzzle

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The Guidance Guarantee, is it enough?
In my last article I reviewed the Government pledge in the Budget announcement that individuals approaching retirement will receive free and impartial guidance to help them make the retirement income choices that best suit their needs. The Guidance Guarantee is a hot industry topic and since last month there continues to be much industry debate on who should provide the Guidance, what it should cover, the consumer outcomes, how and when it will be promoted to consumers and whether the Guidance should be one-off or offered throughout a person’s retirement. So in this month’s article I consider why the Guidance Guarantee is needed and what else could be done to help consumers when the new choices and freedoms are introduced in April next year
Posted on Monday Oct 13

The secret to longer life
This year Reginald ‘Reg’ Dean died on 5th January 2013, aged a magnificent 110. Reg was a very rare British supercentenarian and prior to his death, the oldest man in the UK. When speaking on TV in 2011 he put his longevity down to two things; firstly a ‘mysterious brown-looking’ elixir of life given to him by a doctor when he was an army chaplain in India and secondly his somewhat laid back lifestyle.
Posted on Monday Oct 13

Annuity Armageddon?
The jaw dropping changes announced by the Government to the UK retirement income market in this year’s Budget certainly caught the industry by complete surprise. In the consultation document entitled, ‘Freedom and choice in pensions’, the Treasury outlined its vision of a more flexible pensions system that will foster and encourage a culture of savings by offering consumers unfettered access to their pension fund. So from next April there will be no restrictions on a consumer’s ability to draw down funds from their Defined Contribution (DC) pension pot from age 55 and the tax rules will be drastically simplified to allow that to happen.
Posted on Thursday Jul 3

Annuity Switching – Does Steve Webb’s idea have legs?
In a recent interview for the Daily Telegraph, Pensions Minister Steve Webb said that buying an annuity was a "lottery" that could affect pensioners' retirement income by 15% or 20%, in some cases. Drawing comparisons with mortgages where consumers can switch products and providers, the Minister went on to challenge why consumers shouldn’t also be able to change annuity providers and products a few years later if they could receive a bigger pension. In this month’s article I take a closer look at this challenge by Steve Webb and highlight some of the issues.
Posted on Wednesday Feb 26

Life in the freezer?
A couple of years ago I was asked to look into ‘Cryonics’ and the possible implications for our annuity business. At the time it was something I knew very little about but having delved into it, I found it was a truly fascinating strand of science. So in this month’s article I thought it would be good to see what developments have occurred since then and how much closer we are in our attempt at immortality... and why even Simon Cowell has signed up for it!
Posted on Tuesday Jan 28

Are annuities truly valued?
Annuities have a hugely important role to play in the UK retirement income market but their true value is not recognised and as a result they are being undermined. In the UK, on average, approximately 54% of the income pensioners receive is provided by the state* and so for many consumers, particularly those with smaller pension funds, their private income is merely a top up to state scheme benefits.
Posted on Wednesday Jan 22

RDR and the Annuity Market
Back in 2012 a survey* found that the TV character most closely associated with a "financial adviser" was Del Boy in Only Fools and Horses. Perhaps a little unfair but this was partly due to intermediaries offering ‘free’ advice and their customers assuming they paid next to nothing because of a mystical commission that was paid to the intermediary by the product provider. Another aspect was the larger the commission offered by product providers to intermediaries the more they were influenced to sell products that might not be appropriate to their customers circumstances.
Posted on Monday Sep 23

Can consumers afford to retire?
Over the last few years consumers will have undoubtedly asked themselves that question and it seems many have elected to continue to work. Could it be that the whole concept of retirement has changed, fuelled by falling annuity rates, uncertain market conditions and rising inflation? Certainly industry statistics would appear to support this, because as the chart below demonstrates, in terms of individual annuity contracts sold there was a general decline between 2009 and 2011.
Posted on Wednesday May 15

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