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Annuities and Drawdown Roundup 2011
23 December 2011. For pension investors, this year should have been a year defined by a series of significant policy reforms, ushering in an previously unknow level of flexibility in planning for retirement. Instead, 2011 closed with many retirees facing big cuts to their income or being offered record low annuity rates for their lifetime savings. In April, the Coalition government implemented its promise to scrap the pension rule that, for more than 3 decades, had forced thousands of pension investors to shift their funds out of the stock market and buy an annuity once they turned 75. This reform was coupled with the introduction of flexible drawdown...Annuities News
Just Retirement Wins Top Prize At Service Awards
18 November 2011. Company of the year at the Financial Adviser Service Awards went to Just Retirement, while a score of other names won in the e-commerce, mortgages, investments, life and pensions categories. LV=, Scottish Life and Transact were also among winners. Aviva scored as the most improved in the Investment Providers and Platforms category. ...Just Retirement News
Hornbuckle Mitchell Opens Doors To Flexible Drawdown
27 October 2011. Hornbuckle Mitchell, the Income Drawdown and Sipp provider, has begun accepting applications from clients wishing to take their pension income via flexible drawdown. Flexible drawdown allows pension scheme members who have over £20,000 a year secure income - from state pension, annuities and final salary schemes - to take funds directly from Sipps and other personal pensions without them being subject to a cap...Hornbuckle Mitchell News
Caution Urged Over Fixed-Term Annuities
27 October 2011. As income levels plunge to record lows, investors looking to put off buying a traditional annuity on retirement are being advised to take a cautious view of fixed-term plans that are sold as a way of keeping their pension options open. According to the MGM Advantage Annuity Index, the average rates from conventional and enhanced annuities fell by 4.15% and 2.3% respectively, in the 3 months to the end of September...Fixed term Annuity News
Partnership May Be Sold At Around £750 Million
19 September 2011. Annuity provider Partnership Assurance will be the subject of a bidding war with a price tag in the region of £750 million. Its private equity firm parent Cinven is set to start the process to sell the retirement specialist after receiving a number of takeover approaches...Partnership News
Which Survey Highlights Retirement Shortfall
27 August 2011. Research by Which has shown that a single person hoping to receive a post-tax retirement income of £1,500 per month will need to have saved up a pension pot of £230,000 by the time they reach age 65. If they buy an index-linked annuity, to protect their pension income against inflation, the figure rises to £370,000...Pension Shortfall News
Annuities 'Last For a Lifetime'
26 August 2011. An expert's claimed that an annuity makes a good investment because it lasts a lifetime. According to Fiona Tait, in the FT, retirees should not be deterred from making the alternative investment because of falling rates and dwindling pension funds. "There's no doubt this will cause short term problems for some individuals but is there some good that could come of it?" she asked. "Annuities are for life. The key upside of a conventional annuity is that it doesn't run out." ...Annuity Rates News
LV= eyes up Hornbuckle takeover
19 August 2011. LV is in talks over deal that would create joint provider with 5th largest SIPP book. LV is close to a decision on whether to buy SIPPs and SSASs provider Hornbuckle Mitchell. A source confirmed that LV is in talks with pension specialist Hornbuckle Mitchell and is looking to buy the entire company...LV and Hornbuckle Mitchell News
Stock market falls cut pension values
12 August 2011. 1000's of pension investors are facing a poorer retirement as the world's stock markets slump and continuing falls in annuity rates have cut the income they hoped to receive by nearly 20 percent...Pension News
Will inflation affect my pension earnings?
11 August 2011. Index-linked returns grow at the same rate as inflation. Annuities with indexing are inflation-proof, but many take level-term annuities instead, where their income stays the same. This means it is worth less if inflation starts to rise. Pension savings can suffer in the same way...Inflation News
Expert says no time to lock into conventional annuity
11 August 2011. Those approaching retirement have been advised not to lock into conventional annuities amid tumbling markets. MGM Advantage has said pension investors might consider flexible annuities instead as a more lucrative alternative...Flexible Annuities News
Are We Getting A Raw Deal From Fixed Term Annuities?
3 August 2011. Are consumers getting a raw deal from fixed term annuities? The fixed term annuities market is growing fast, with more than 4500 advisers using them. But how do they compare with enhanced rates for lifetime policies and drawdown and are they a good deal for clients?...Fixed Term Annuity News
Thinking Ahead About Retirement: Retirees Advised To Seek IFA Guidance
1 August 2011. Those thinking about retirement are being advised to seek out the help of Independent Financial Advisers (IFAs). Which Advisor made the recommendation, which showed up to 90 percent of IFAs believe the recent decreases to annuity rate payments will increase consumer demand for annuity alternatives to ...Retirement IFA Advice News
Falling annuities bode ill for pensioners: MGM Advantage
12 July 2011. MGM Advantage has warned that pensioners are facing a diminishing pot of money to support ever-increasing longevity after annuity rates fell over the past 3 months. MGM Annuities said income paid on enhanced and conventional annuities between March and June fell by 0.18 per cent and 3.5 per cent respectively....Annuity Rates News
UK to apply EU insurance gender rule from end 2012
30 June 2011. The UK will enforce a European Union ban on sex discrimination in insurance pricing from the end of next year, a government minister said on Thursday, dispelling insurers' concerns that the measure could apply to existing policies. Legal experts say the ruling is significant for many insurers in Europe because they use gender as a risk factor to price policies including annuities...Annuities Gender Rule News
Nest appoints 5-strong annuities panel
22 June 2011. National Employment Savings Trust (Nest) has revealed details of 5 annuities providers that have been appointed to its retirement panel, with each getting a contract that runs for ten years. Nest's panellists are: Canada Life and Legal and General Annuities (L&G) for both conventional and enhanced annuities; Just Retirement enhanced annuities and Partnership enhanced annuities; and Reliance Mutual for enhanced annuities specifically for those who smoke...Nest Annuities News
Hargreaves Lansdown and Wealth 150 attacked for 'secret commissions'
13 June 2011. Hargreaves Lansdown has been criticised for not fully disclosing its financial arrangements with fund managers. The Daily Mail said Hargreaves Lansdown is wrong to keep fees so secret. He said Hargreaves Lansdown is at a crossroads...Hargreaves Lansdown News
Annuity clients missing billions
10 June 2011. Research suggests that customers are missing out on billions of pounds by not applying for an enhanced annuity and financial advisers could be part of the problem. Independent research commissioned by Oxford Economics, on behalf of the Pension Income...Enhanced Annuities News
The Pru issues warning over fixed-term annuities
9 June 2011. Pru Annuities warns that products are "bizarrely" governed by income drawdown rules and urges advisers to check explanation of risk in suitability letters. The Pru has issued a warning to advisers over fixed-term annuities, saying that clients may not understand the risk profile of the product. The comments follow the launch of new fixed-term annuities by providers such as Just Retirement, Living Time Annuities and LV Annuities (Liverpool Victoria Annuities)...Fixed Term Annuities News
Half not saving enough for retirement
7 June 2011. A new report shows that nearly half of all those over 30 are not saving enough to fund their income needs in retirement, while a fifth are saving nothing at all according to Scottish Widows' seventh annual pensions report. Scottish Widows' Pensions Index looks at those between 30 years and state pension age who earn more than £10,000 per year...Retirement News
Annuity rates jump 1% in three months
2 June 2011. Pension payout rates have risen 1.3% in the past three months, providing a boost to those coming up to retirement. The payout rate is measured by the return on annuities, which convert a pension pot into a lifetime income stream....Annuity Rates News
Income drawdown plans set to become more popular
2 June 2011. Income drawdown, traditionally more popular among wealthier individuals, is set to broaden its appeal and become more mainstream, according to the results of a new survey by Skandia. The research found that the vast majority of financial advisers surveyed believed that the recent changes to income drawdown rules will result in more people delaying purchasing an annuity...Income Drawdown News
Higher annuity rates may not last long
2 June 2011. Pru Annuities reports that those who currently enjoy higher annuity rates might find that this trend is only short term. It is possible that the UK is unlikely to see the long-term continuation of these high annuity rates... News: Pru Annuity Rates News
Consumers 'need more education' over annuities
11 May 2011. When it comes to annuity products, UK consumers need to be provided with an even greater level of education by firms operating in the country's financial services sector, it has been suggested. The Open Market Option is one area where further information could be provided to people, according to MGM Advantage... News: Call for Annuities Education
HMRC u-turns on income drawdown rules
20 April 2011. The taxman has back-tracked on income drawdown rules that could have left some investors trapped in poor personal pensions, in response to pressure from pension providers. The draft of the Finance Bill published on 31 March, said all savers switching their pension funds to new pension providers after 6 April would become subject to new, stricter withdrawal limits when later going into capped drawdown.... News: Income Drawdown Rules
Savers advised to delay flexible drawdown decision
19 April 2011. The taxman's clarification on the rules for flexible drawdown mean that savers could benefit from not entering flexible drawdown until a year after they secure their income. HM Revenue and Customs (HMRC) has clarified rules around flexible drawdown, stating that the £20,000 minimum income requirement (MIR) needs to be evidenced for the tax-year in which drawdown is taken and not just guaranteed... News: Flexible Drawdown Rules
Income drawdown rules trapping pensioners with poor pots
13 April 2011. Pension experts warn investors could be stuck in poorly performing plans, as transfering out could lead to a loss of income following changes to drawdown rules. New income drawdown arrangements, which became available on 6 April, allow investors to withdraw 100% of their GAD or equivalent annuity rate...Income Drawdown Rules
Hornbuckle to delay offer of flexible drawdown
31 March 2011. Hornbuckle Mitchell will not be offering flexible drawdown on the 6 April 2011 when the new rules come into force, head of sales has confirmed...Flexible Drawdown
Just Retirement: OMO is past its sell-by date
17 March 2011. Scrapping the open market option (OMO) and replacing it with a 'pension passport' will help consumers to shop around for annuities. The Pensions Income Choice Association has reinvented shopping around with a three step process that will encourage people approaching retirement to choose between annuity providers, claims Just Retirement...Just Retirement Annuities
Dangerous rush to meet Income Drawdown deadlines
14 March 2011. Scottish Life has warned of the danger of providers rushing to meet the start date to introduce flexible Income Drawdown. Scottish Life, told FT Adviser providers had no hope of meeting the start date of 6 April 2011 saying "We still have not had the results of the consultation on flexible Income Drawdown and it is due to start on the 6 April...Income Drawdown
Income Drawdown Changes Will Benefit Older Pensioners
8 March 2011. Changes to Income Drawdown rules coming into force in April are likely to increase the number of people deciding to use drawdown in their later years. Within the new legislation coming into force from April there were 3 changes that would particularly affect older pensioners use of drawdown. Firstly, the company pointed out that under new Capped Income...Income Drawdown
Industry anger at EU annuities rates ruling
1 March 2011. Industry experts said the increased cost of compliance is expected to lead to insurance underwriters and pension providers cutting annuity payouts. The head of pensions research at Hargreaves Lansdown, said...Annuity Rates
Annuities: Changing times call for different measures
23 February 2011. The results of the latest Retirement Planner Enquiry, into how recent reform will affect the annuity market, are in. The rate of retirement income...Annuities Market
Just Retirement to launch flexible annuity
23 February 2011. Just Retirement has revealed it is working on a flexible fixed-term annuity product to bring out in the summer...Just Retirement Annuities
New drawdown rates could 'shock' pensioners
28 January 2011. HMRC is creating new figures to calculate Income Drawdown limits which could reduce pensioner incomes, experts warn. The new Capped Drawdown amounts for individuals will be 100% of their equivalent annuity, rather than 120% as before...Income Drawdown Rates
Variable annuities endangered?
27 January 2011. What does the future holds for the variable annuity market and how that will affect the third way sector as a whole? The third way annuity market has expanded rapidly over the past 4 years with providers developing variable annuities, as well as fixed-term and asset backed annuities...Variable Annuities
MetLife to distribute Living Time products
14 January 2011. MetLife Annuities will distribute the Living Time fixed-term annuity products as part of MetLife's expansion strategy. MetLife claimed the deal underlines its continued commitment to product innovation in the UK market and enables it to establish a presence in the rapidly growing fixed-term annuity category which Living Time Annuities...Living Time Annuities
‘Misleading’ Aviva annuity ad banned
21 December 2010. A TV advert for Aviva Annuities, in which the insurer claims it can provide 20% more income for annuity customers, has been banned by the Advertising Standards Authority. The ad features a voiceover saying: "when you retire get up to 20% more income with Aviva". Aviva claims its annuity rates...Aviva Annuities Ad Banned
End of Compulsory Annuities
14 December 2010. You could almost hear the pensions industry raising a collective cheer as the government announced plans to scrap the compulsory annuity purchase requirement. The abolition of the age-75 rule follows years of furious pension industry lobbying...End of Annuities
Pensioners need £20,000 to access flexible drawdown; IFAs to incur training costs
9 December 2010. Access to new flexible Income Drawdown pensions will be restricted to people with a lifetime pension income of a minimum of £20,000 a year, the Treasury says. The rule change is included in a package of draft clauses published today by the Treasury for inclusion in the Finance Bill 2011. Capped Drawdown amounts...Income Drawdown
End of compulsory annuitisation in sight
8 December 2010. The government will soon announce its consultation on scrapping compulsory annuitisation at age 75. The plan aims to change current annuity rules that stipulate individuals have to take an income from their pension fund from the age of 75. This can be through buying an annuity or by taking an income directly from their pension fund, known as an alternatively-secured pension. Philip Brown, head of retirement for Partnership Annuities...Compulsory Annuities
Annuity rates increase but not the start of a trend
29 November 2010. Rising bond yields appear to be feeding through into the annuity market with six insurance companies increasing their rates over the last week. A pensions analyst at Hargreaves Lansdown, does not think this is the start of a sustained trend. He claimed the Hargreaves Lansdown annuity...Hargreaves Lansdown Annuities
Just Retirement Annuity Sales up 14 per cent
11 November 2010. Just Retirement's new annuity business sales are up 14.9 per cent to £245.5m according to its interim results. The retirement specialist's annuity policies...Just Retirement Annuities
Hoban defeats extra Equitable Life payments
11 November 2010. Thousands of Equitable Life victims who bought annuities before 1992 will receive no compensation despite a proposed amendment to include them in the government’s repayments package...Equitable Life Annuities
Government can't calculate Equitable Life compensation for extra 10,000 annuity holders
10 November 2010. The level of due to 10,000 Equitable Life customers who bought with-profits annuities before 1992 would be "impossible to calculate", Tory MP Jonathon Edwards says. During a debate on the Equitable Life...Equitable Life Annuities
Retirees missing out because of illogical behaviour
20 October 2010. Thousands of people could be missing out on a better retirement income because of an illogical approach to shopping around for the best annuity deals according to Aviva Annuities. The retirement specialist said while people are used to comparing prices for routine items like food and holidays, the same logic is not always applied to buying annuities...Aviva Annuities
Just Retirement sales hit £1bn record
19 October 2010. Just Retirement has generated sales of over £1bn for the first time in its history, a year-on-year improvement of 33 per cent. Just Retirement's embedded value has grown by 107 per cent over the last year. Just Retirement said...Just Retirement Annuities
Lansdown cashes in £58m in sale of Hargreaves Lansdown shares
14 October 2010. Stephen Lansdown, co-founder of Bristol-based Hargreaves Lansdown, has taken a further step back from the advisory business after selling more than 13m in ordinary shares. Mr Lansdown’s shares were...Hargreaves Lansdown Annuities
Just Retirement acquisition will build on Open Market Option plans
5 October 2010. Just Retirement is acquiring The Open Market Annuity Service (Tomas) from Kerr Henderson. The acquisition is part of the specialist life assurance group's strategic goal to invest in further development of the open market option. Just Retirement said...Just Retirement Annuities
Advisers turn to asset-backed annuities as rates plunge
16 September 2010. Advisers are set to turn their backs on conventional annuities and recommend asset-backed alternatives as annuity rate crashes continue to plague retirees. A study conducted by MGM Advantage suggests more than 90% of IFAs expect the market for...MGM Annuities
Axa to enter variable annuity market
14 September 2010. Axa Annuities is ready to enter the variable annuity market in the UK before the end of the year. The managing director of Axa Global Distributors, said it would complement the newly created Axa Wealth business...Axa Annuities
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