When will annuities bounce back? The market has been waiting a long time for annuities to bounce back from historically low levels but despite a few false dawns, rates have remained stubbornly low. The chart below shows the income from our benchmark annuity* (left axis) and the yield form our benchmark gilt** (right axis) over the last three years. *The benchmark is a £ 10 ...
Blog and press cuttings
The case for annuities is getting stronger
It is still not the year of the annuity! In January I wrote a piece asking if 2018 was going to be the year of the annuity? For the Chinese, 2018 is the year of the dog but in the UK, annuities have been in the dog house since pension freedoms and they look like remaining in the kennel for sometime to come. The case for annuities is getting stronger There are few people more ...
Retirement advice; an art or a science?
Retirement advice; an art or a science? This is the working title for a new guide I am writing which looks at the retirement advice process. One of the reasons advices at retirement is so complicated is there are a lot of technical factors and a lot of behavioural factors to take into account. One of the advantages of looking at both the technical and emotional side of retirem ...
Annuitisation; it shouldn’t be a secret
In last month’s article I said retirement advice doesn’t have to be black or white because there are solutions that bridge the gap between annuities and drawdown. I went on to say that I thought it was difficult to innovate annuities there was plenty of scope to innovate the way advice is delivered. I was very pleased to get a response from Peter Ellis at Just Retirement. He m ...
Annuities & Drawdown - it is not black or white
Fixed term income plans – retirement options do not need to be black or white It seems that every time I go a conference there is someone talking about the need for innovation in retirement income plans. Having watched various product developments over the last 20 year it comes as no surprise to me that the elusive new plan which fits half way between an annuity and drawdown h ...
Practice what I preach
It has been 16 months since I started advising clients again after a break of four years. Obviously much has changed after pension freedoms not least that annuities are less popular and drawdown has become the new default at retirement. This is not a problem nor an issue for a good adviser because they will always work out what is the best solution for the client rather than be ...
Update May 2018
Annuity Update May 2018 As I review annuity rates at the beginning of May 2018 I am struggling to say anything new because there has been little meaningful change to rates over the last few months except for relatively small changes to some rates when yields have changed. Little has changed Annuity rates have been stuck in a narrow band for the last 8 months with the benchma ...
Annuities -one step up, one step back
One step forward, one step back In my last annuity update at the end of February I was upbeat about the annuities and the opening sentence was “Annuities are coming out of the doldrums as rates rise are rising on the back of increased bond yields.” Just over a month later the wind has been taken out of my sails as gilt and bond yields have fallen resulting in lower annuity ra ...
Annuity comparator makes it easier to shop around From 1 March 2018 every firm issuing guaranteed annuity quotes must comply with new rules set out in the FCA’s policy statement PS17/12. In simple terms, firms will need to ask customers for their consent to use personal information in order to produce an annuity comparator. The annuity comparator is simply a new type of annui ...
Weathering the storm
Over the last few weeks we have been busy reviewing many of the pension drawdown plans we have arranged for our clients looking to see how they have weathered the recent the recent fall in global equity prices. The recent market correction was not a full-blown crash, probably not even a mini crash, just a short-term reaction to the possibility of an overheated US economy. We t ...
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If you want to make the most of pension freedoms you should start planning ahead and make sure your financial affairs are in good shape in the years running up to retirement.William Burrows
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