Pension news

Pension news http://www.savingforretirement.co.uk Standard Life adds benefits to Sipps proposition People looking for ways to aid saving for retirement may be interested in changed to Standard Life's Self Invested Personal Pensions (Sipps) investment deal. Sipps, described as "modern, flexible [and] innovative" by the company, enables customers to build up a pension by regularly investing or putting in occasional lump-sum amounts. Tax-free sums and income can then be withdrawn as an alternative to pension annuities, it explained. Now, the package on offer includes access to more than 1,000 funds from its own and other investments, a Net Asset Value deal on funds and discounts on annual administration charges. Furthermore, fund trading occurs online to make transactions faster and more accurate. Dave Campbell, director of retirement solutions at the company, said: "This enhancement is great news for advisers who want to use a 'clean' mutual fund platform for Sipp investments." In other news, 1st Property Investment has said the seafront housing market is experiencing a boom despite the credit crunch because older people are buying retirement homes on the coast. http://www.savingforretirement.co.uk/Standard-Life-adds-benefits-to-Sipps-proposition-175_1_18739563.html Tue, 19 Aug 2008 16:34:29 +0100 Saving for retirement 'means saving for excitement' Madonna may be an idol for many reasons, but for the over-50s she is one of many for whom the half-century means new challenges, according to Alliance & Leicester. The pop singer, who turned 50 at the weekend and is about to embark on a world tour, has highlighted the trend for people travelling into their retirement years. Figures from the building society show over a quarter (26 per cent) of those over 50 plan to travel to Australia or New Zealand and three per cent are planning trips to Antarctica. Scuba diving, flying a helicopter, performing in front of a large audience, running a marathon, bungee-jumping and skydiving are also on many over-50s' list of priorities. All these activities are likely to cost money that will take a chunk out of nest egg savings for retirement. Company and shareholder pensions may be the answer for those expecting an excitement-filled life in their 50s and 60s and beyond. Saving for retirement may also benefit those worried about their health. According to Emma Walkley, current account manager at the company, 78 per cent of those questioned said "getting medical advice is 'extremely important' to them." http://www.savingforretirement.co.uk/Saving-for-retirement-'means-saving-for-excitement'-175_1_18736737.html Mon, 18 Aug 2008 14:42:09 +0100 Scots 'not aware' of pension income A study released by Aegon UK this week has shown Scottish people nearing retirement are the most likely to see it as the beginning of old age. Furthermore, the research, published in the Scotsman, found 39.6 per cent of people between 50 and 65 do not know how much income they will receive annually from pensions. In reality, 35 per cent of the age group will receive less than £10,000 per year of their retirement. In the UK as a whole, 86 per cent of those questioned thought they would have enough to live off if they gave up work at retirement age. Speaking to the newspaper, the insurer's head of pensions policy Rachel Vahey said people needed to find out how much they would receive after saving for retirement. "In a way the level of retirement income isn't the most important aspect it's making sure that people aren't surprised to find out how much they have to live on," she commented. Sipps and nest egg savings accounts may be ways to boost state or company pensions. http://www.savingforretirement.co.uk/Scots-'not-aware'-of-pension-income-175_1_18735318.html Fri, 15 Aug 2008 17:20:02 +0100 Those saving for retirement should factor in health Legal and General has drawn attention to the issue of illness for people saving for retirement. To build up a pension of £20,000 per year, a 30-year-old would have to put aside £292 per month but this figure increases if the saver suffers an illness. Depending on the illness and recovery time following it, income and the ability to save could be severely impaired. Postponing saving for retirement by ten years could mean monthly contributions rising to £635 per month, for example. Taking out cover could prevent facing such a rise. Bonnie Burns, protection product marketing director for the company, said: "Critical illness cover should be an important consideration for anyone looking to protect their lifestyle and their ability to continue to save." She added that the sooner savers take out a policy, the lower the cost. "You can protect your most important years in terms of savings capacity," Ms Burns concluded. This week, Key Retirement Solutions said many British people are set to retire in debt. http://www.savingforretirement.co.uk/Those-saving-for-retirement-should-factor-in-health-175_1_18735301.html Fri, 15 Aug 2008 17:19:02 +0100 LCP: Life expectancy affects pension scheme funding Longevity assumptions are almost as important as investment variability to pension scheme funding levels, a firm of actuaries and consultants has said. Those saving for retirement may be interested in comments made by Lane Clark & Peacock LLP (LCP), which suggest people need to look at life expectancy when arranging pensions. Partner at the firm, Adam Poulson, explained: "Changing one year life expectancy can add around three per cent in pension liabilities in an average scheme. It's a reasonably significant assumption." He went on to say that around a quarter of FTSE Global 100 customers display longevity assumption details and most of the information is UK-based. He called for such companies to be "more transparent, more consistent and more sophisticated" in their setting of assumptions. There are discrepancies between life expectancy levels in different countries, Mr Poulson said, while levels have increase by four to five years in the past three decades. LCP was founded in 1947. http://www.savingforretirement.co.uk/LCP:-Life-expectancy-affects-pension-scheme-funding-175_1_18730231.html Wed, 13 Aug 2008 15:39:50 +0100 Debts rising for retirees, says study Research released by a retirement planning company has found people are heading towards debt rather than saving for retirement. More than a third of British people over the age of 55 are approaching retirement in the red, with £66 billion worth of unsecured debts collectively, Key Retirement Solutions has said. A quarter of those questioned had outstanding personal loan payments, a fifth had credit card debts and three per cent are into their overdrafts, the study showed. The findings were based on 4,507 British people over 55 who have released equity on their homes, but even results from just this group were worrying, according to the company's business development director, Dean Mirfin. "It is more important than ever that consumers are aware of the dangers of approaching retirement with such large amounts of debt," he said. Mr Mirfin added that retirement years "should be a time to enjoy yourself" but many people are finding getting by difficult. In related news, Fair Investment has said 87 per cent of people believe they were mis-sold endowment policies and are now left with a shortfall. http://www.savingforretirement.co.uk/Debts-rising-for-retirees,-says-study-175_1_18730224.html Wed, 13 Aug 2008 15:38:54 +0100 Retirement 'risky' during economic downturn Those approaching their retirement during times of economic downturn are being urged to consider all their options carefully. Running out of money while the economy is strained is a real possibility, a Forbes article warns. Speaking to the news provider, T Rowe Price investment analyst James Tzitzouris said: "Any money that retirees take out of their portfolios or that they lose in market-declines in the first five years of retirement has a higher cost." He explained that this happens because such funds would not be invested to earn returns when markets subsequently recovered. Another option would be to shelve plans to retire at the age of 65 or consider continuing to work at least in part-time employment in order to offset negative financial implications. Financial planner Marty Palumbos of Lincoln Financial Advisors told Forbes that at this age, many people may be at their peak as they have plenty of skills and should carry on working if they are able to do so. Many financial experts highlight the importance of starting to save money as early as possible in order to ensure a comfortable pension when the time comes for them to retire. http://www.savingforretirement.co.uk/Retirement-'risky'-during-economic-downturn-175_1_18728833.html Tue, 12 Aug 2008 18:06:40 +0100 Pensions 'not adequately reviewed' Britons are being urged to take independent financial advice when it comes to their pension portfolio. Millions of consumers are believed to take out a pension without giving appropriate consideration to the level of risk and return associated with their investment, according to Baring Asset Management. Research by the firm found that 13.6 million people have never reviewed their pension plan - something its chief investment officer Marino Valensise says is "concerning". He said it was "surprising" that people are not aware of how their money is being invested and whether their pension will offer them the necessary retirement returns. "Coupled with the fact that people are not putting aside enough funds in general for their retirement, it's clear that many people could face a serious shortfall when they reach retirement age," Mr Valensise concluded. Industry body IFA Promotion states on its website that it is crucial people "keep a close eye" on their pensions, particularly in terms of how much is saved, which investments area chosen and what level of retirement income will be provided. http://www.savingforretirement.co.uk/Pensions-'not-adequately-reviewed'-175_1_18725769.html Mon, 11 Aug 2008 15:29:08 +0100 Savers urged to look at annuity returns A newspaper has commented on the differences between annuities and the importance of investigating them. The Daily Telegraph has this week pointed out that annuities have an open market option, meaning people saving for retirement are free to agree one with any life company they choose. Different annuities yield different returns with 15 per cent between the best and the worst, according to the paper. "That's a big difference when you remember this determines these pensioners' income for the rest of their lives," said finance writer Ian Cowie. However, he went on to say less than half of those saving for retirement with an annuity bought one from another company than that running their employers' pension scheme. People can be "baffled by the paperwork" involved in choosing an annuity, he continued, adding that the market does not make it clear that an open market option is available. Halifax's Pension Health Check report, released this week, stated 45 per cent of those questioned knew the meaning of annuity. http://www.savingforretirement.co.uk/Savers-urged-to-look-at-annuity-returns-175_1_18723794.html Fri, 08 Aug 2008 16:13:36 +0100 Brits 'confused' about pensions Halifax has released a Pension Health Check report to coincide with the centenary of the state pension, revealing British people are not aware of various details of saving for retirement. The report found that 79 per cent of those questioned were not aware of when or how they would receive their pension, while 83 per cent did not know how much of their personal pension they could take as a tax-free lump sum at retirement. Also, 61 per cent said they did not understand the difference between state and personal pensions and over a third (35 per cent) of respondents thought they were not entitled to a state pension. Karen Crowshaw, managing director of Halifax Financial Services, said the research showed "confusion over pensions." "Costs are rising and people are living longer which means it is more important than ever before that people have the funds in place to support their lifestyle in retirement," she said. Ms Crowshaw added that people should obtain financial advice when planning pensions. Earlier this week, Prudential said people should start saving for retirement as soon as they could. http://www.savingforretirement.co.uk/Brits-'confused'-about-pensions-175_1_18723785.html Fri, 08 Aug 2008 16:12:52 +0100 Pensions should be agreed "as soon as possible" A study released by Legal & General has revealed delaying saving for retirement could mean a shortfall of several thousand pounds. To built nest egg savings of £20,000 per year from the age of 60, people who begin saving at 35 years old will need to put aside £423 every month, the research showed. If saving begins at age 25, however, less than half needs to be invested per month to achieve the same amount a sum of £205. A delay like this could add £40,000 to the total contributions payable over a working lifetime, the study concluded. Wealth policy director at Legal & General Adrian Boulding said people should start saving for retirement from a younger age to avoid the risk of paying more later on. "When you are 25 or 30, retirement seems like a long time away but if people begin to save even a relatively modest amount they can look forward to a much more comfortable retirement," he advised. He added the rising cost of living could push pensions down the list of priorities. Mr Boulding's comments echo those made by Prudential recently. http://www.savingforretirement.co.uk/Pensions-should-be-agreed-as-soon-as-possible--175_1_18722064.html Thu, 07 Aug 2008 17:18:47 +0100 Retirement saving should begin earlier, says expert As the state pension's centenary is marked, Prudential has said it cannot be relied on to offer a comfortable standard of living. To ensure a healthy nest egg is waiting, people should be saving for retirement earlier, said Julie Mulvanny, the company's head of business development for individual pensions. "[People] need to be saving an awful lot more from a younger age and get into that habit of saving in order to provide a decent retirement for themselves," she warned. Ms Mulvanny said even a basic income was not provided by the state pension because it does not keep in line with national average earnings. She added that someone must take responsibility for pensions to address the problem of an aging population. http://www.savingforretirement.co.uk/Retirement-saving-should-begin-earlier,-says-expert-175_1_18719172.html Wed, 06 Aug 2008 15:22:47 +0100 State pensions offer "very little income" A financial services company has been speaking about the difficulties faced by people saving for retirement. Prudential's head of business development for individual pensions, Julie Mulvanny, said many people are cutting back on pensions contributions and nest egg savings, despite state pensions not offering a great deal for retirement. "The average pension pot in the UK is about £25,000 and the annuity pots we have the average in them is about £25,000, which is very little income over the period of retirement," she said. Ms Mulvanny added that many people previously relied on property for their retirement, by downsizing or releasing equity from their homes, but with the housing market in decline this is not a viable option. Increased mortgages and household bills are pushing pensions savings to the bottom of lists of priorities, she said. According to research from Prudential, over a third (37 per cent) of working-age adults in the UK are losing sleep due to worries about their retirement finances. http://www.savingforretirement.co.uk/State-pensions-offer-very-little-income--175_1_18716977.html Tue, 05 Aug 2008 15:17:32 +0100 Private banking can offer "personal service" to retirees People wishing to get advice for saving for retirement may be interested in private banking, comments made by an expert have suggested. According to Re-Financial Planning, the "personal service" offered by private bankers may benefit people with investments or finance in the UK and abroad. Director David Higgins said: "The personal service is what they hang their hat on you're dealing with one or two people rather than going through a call centre." He added those with "sophisticated affairs" could managed better than a standard banking facility. People reaching retirement age who wish to discuss options such as Sipps, Isas, annuities or nest egg savings accounts may like to look outside their bank for information. It also appears that private banking is increasing in popularity. According to investment management company Schroders' figures from April, their private banking pre-tax profits rose 54 per cent with a net income rise of 11 per cent. http://www.savingforretirement.co.uk/Private-banking-can-offer-personal-service-to-retirees-175_1_18715504.html Mon, 04 Aug 2008 17:23:00 +0100 State pension is 100 but doubts surround its survival Today (August 1st) marks the centenary of Royal Assent of the Old Age Pensions Act 1908, with the anniversary marked by reforms to the system. Secretary of state for work and pensions James Purnell said changes would be made to ensure women and carers get fairer treatment, to re-link average earnings and making rules clearer. Recent statistics from the Department for Work and Pensions (DWP) found 44 per cent of people were sure the state pension would not exist when they reached retirement. Those saving for retirement may wish to look at other plans available for nest egg savings in addition to the state pension, particularly as health developments mean retirement lasts longer than ever. Mr Purnell commented: "Current trends suggest the UK will have its first 120 year old in the early 2060s, if not before. That means she is already drawing her state pension and will do so for half her lifetime." He added the rise in everyday expenditure means putting together a plan for retirement is a priority. http://www.savingforretirement.co.uk/State-pension-is-100-but-doubts-surround-its-survival-175_1_18712329.html Fri, 01 Aug 2008 14:26:48 +0100