This year has been an exciting year for IFAs in terms of new legislation for pensions and ISAs (NISAs). The new legislation should help IFAs generate more business as people engage with the need for advice around the changes, particularly the pension legislation. Read more
All change – Pensions & Intestacy – Death & Taxes
George Osborne announced what looked like significant improvements to pension legislation for April 2015 at the Conservative Conference earlier this week.
The radical changes would mean that you can inherit pension funds from your parents. This could lead to generations benefiting from using a parent’s pension fund. Read more
Annuities – A Complex Area
Annuity sales have dropped 43.8% in June compared to June 2013 as retirees await the new pension freedoms in April 2015.
Rates for standard annuities are actually increasing at the moment, the average single life annuity secured an income of £3,552 per annum in June, up by 3.7% from £3,426 in May. This is the highest annuity rate in at least a year and compares to £2,942 in June 2013. Read more
Thinking of Deferring Your State Pension?
The government has nearly halved the incremental increase to the state pension offered to people that opt to defer their state pension.
The Pensions Minister Steve Webb said that individuals who chose to postpone their drawing of the state pension beyond the state pension age would get a 5.8% a year increase for each year deferred, down from 10.4% currently. Read more
Work Place Pensions – Increasing Need for Advice
Pensions Minister Steve Webb stated this week that he believes budget changes would fuel appetite for workplace pension advice at the Retirement Planning Forum Awards 2014.
I think he’s right. The guidance guarantee will surely explain just enough to people due to take retirement benefits to prompt the need for independent financial advice. Guidance for 15 minutes, even when it is free, is just not enough to cover the options for retiring staff. Read more
Retirement plans a reality check
Older people’s charity Anchor had researchers question 2,000 people about their perception of a happy retirement – the outcomes can be summarised:
Most of us long to retire by age 63, with a three bedroom home just 11 miles away from the rest of the family. Read more
Pension Income Alternatives to Annuities
Whilst annuities are the favoured approach for the majority of people retiring they tend to get used for the smaller pension funds. The average pension fund size at retirement is circa £35,600 and the median size pension fund is £20,000.
For those people with substantial assets for their retirement a variety of other options may be more appropriate. A range of different types of ‘Drawdown’ could give additional flexibility for clients with six or seven figure pension funds. Read more
Annuities
Following the recent budget announcements on more flexible retirement options for those drawing pension benefits the annuity sales figures have declined dramatically. People may defer a decision on how they take their retirement benefits until the legislation changes for April 2015 are clarified.
Prior to the announcement, the majority of people, circa 75%, who reached retirement with defined contribution pension savings, used them to purchase an annuity. Read more
Pensions – Potential Legislation Changes
The consultation on the proposed legislation changes, ‘Freedom and Choice in Pensions’ for the proposed changes in April 2015 closed yesterday, 11/06/14.
As we know, the majority of this focus has been on the ‘at retirement’ market to give more choice and flexibility for those people drawing their pension benefits from Defined Contribution pension schemes. Read more