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Annuity comparator process raises issues for advisers

Annuity comparator process raises issues for advisers

The advent of pension freedom means more people are now using income drawdown, with fewer choosing to buy an annuity. But we still need to make sure as many of the 80,000 or so people who are buying an annuity each year get a good deal. Which is why the FCA are introducing an annuity comparator from 1 March 2018.

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How to help your clients make the most of pension death benefits

One of the most popular changes introduced by Pension Freedom were the significant alterations to the taxation of pension death benefits. There was a reduction in the disliked headline tax rate of 55%. And drawdown provides a simple way for people to pass on pension wealth in a tax-efficient way. However the rules around death benefits are not simple, so careful planning is essential.

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Andrew Tully: How to give cautious drawdown clients more flexibility

Pension drawdown has become the favourite retirement option since the pension freedom changes, with more than twice as many people moving into drawdown than buying annuities. And for all pot sizes in excess of £30,000, drawdown is the leading solution. Drawdown used to be the preserve of the wealthier retiree, but these figures help illustrate that is no longer the case.

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Is your investment proposition fit for retirement?

Is your investment proposition fit for retirement?

One thing that comes out loud and clear from the recent FCA Interim Review of Retirement Outcomes is the extent to which drawdown has eclipsed the annuity as the default choice for retirees once they start to access their pensions. Before pension freedoms, 90% of people went straight into an annuity. Post freedoms, if we exclude those who empty their pension in one go, around two-thirds go into …

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Retirement pension; the new birthday present?

Retirement pension; the new birthday present?

All parents want the best for their children when it comes to presents, from the newest Xbox to the coolest trainers. However, studies are showing that the best present you could give your child could in fact be a pension.

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Growth in transfers drives popularity of hybrid solution

The increasing number of people seeking pension transfers presents both challenges and opportunities to the adviser community. According to research we recently commissioned, advisers qualified to advise on pension transfers have seen an increase in the number of requests to transfer final salary pensions over the past year.

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The 2 new risks for clients in drawdown

The 2 new risks for clients in drawdown

In the post pension freedoms world, we’ve seen some big changes in the way clients are using their pension pots. Many have simply cashed in and taken the money. Many more have gone into drawdown and still a substantial portion continue to use annuities. Let’s look at those clients who would have bought annuities in the past, but are now moving into income drawdown. They’ve …

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Budget 2017 - Andrew Tully's response

Budget 2017 - Andrew Tully's response

Philip Hammond’s first (and last) spring Budget contained a variety of new measures alongside confirmation of a number of changes previously announced.

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Are your clients affected by the reductions to MPAA?

Are your clients affected by the reductions to MPAA?

In last year’s Autumn Statement the Government proposed reducing the Money Purchase Annual Allowance (MPAA) from £10,000 to £4,000, from 6 April 2017. So you may want to work out now which of your clients are affected and consider any action you wish to take as Philip Hammond confirmed this change will happen, in the Budget on 8 March. The MPAA restricts the payments which can …

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Loosening the lifetime allowance for drawdown clients

As a result of the pension freedoms, more clients are likely to be in drawdown at age 75 and beyond. However, this means a lesser-known tax aspect is going to start having an impact on more people. The snappily titled Benefit Crystallisation Event 5A comes into play for those still in drawdown at age 75. It measures the growth in the drawdown pot since the member originally entered it. If people …

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The pensions vs property debate needs more public attention

Many approaching and in retirement have significantly greater wealth within their home than in their savings pots. Historically, people view their home as an asset they want to pass to family. However, times are changing and the old view that retirement income is based largely on pension savings simply will not deliver for most.

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Pension drawdown: 3 questions to help spot clients most at risk

Pension freedom has highlighted the flexibility and control offered by income drawdown. Before April 2014 the number of people using drawdown was relatively small, but many more people now choose this option. But the increasing numbers of people opting for drawdown brings its own risks and challenges for customers and advisers. Drawdown used to be the preserve of the wealthier retiree, but that …

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The future of annuities: beginning or end?

The future of annuities: beginning or end?

In his latest blog for Nucleus, Andrew Tully, Pensions Technical Director at Retirement Advantage looks at how the retirement market has changed substantially over the last 18 months since the pension freedom changes. More money is now going into drawdown than annuities, rates have been hit by Solvency II and lower gilt yields, and we have seen several providers pull out of the annuity market. …

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Adapting Annuities

Adapting Annuities

The shape of the retirement market has changed substantially over the last 18 months since the pension freedom changes. Annuity sales have fallen from around £11 billion to around £4 billion, rates have been hit by Solvency II and lower gilt yields, and we have seen several providers recently pull out of the annuity market. So does this spell the beginning of the end for the humble annuity?  …

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Annuities – choose the shape, then the rate

Annuities – choose the shape, then the rate

One of the biggest disappointments recently has been the significant decrease in the proportion of people shopping around for the best deal. Fortunately those who take advice are much more likely to get help shopping around. But rate is, of course, only one aspect – it is also crucial people choose the right shape of annuity, with the additional features that meet their individual needs. …

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Combatting market volatility in retirement

Combatting market volatility in retirement

Volatility in markets isn’t new. But there seem many reasons to expect significant volatility over the next few years across both equity and fixed interest markets. The UK will be beginning to nail down the divorce terms from the EU as well as decide the basis of our future relationship. Add in elections in France and Germany next year and there is a fair amount of political uncertainty. …

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7 reasons customers may benefit from using a hybrid solution

Retirement planning has often been a binary choice, left turn for annuity or right for income drawdown. But that stark choice may not meet all of a customer’s needs. People are attracted by access to funds, flexibility over income, and the ability to cascade unused funds down the generations after their death. But they also value the certainty of money hitting their bank account each month …

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Will the UK's average pension pot stand up if the ‘triple lock’ is scrapped?

In recent years, the UK government's austerity drive has led to numerous attempts to cut welfare expenditure, as Chancellor George Osborne pursues his aim of reducing the national debt. The latest target for reduced spending in March's Budget announcement was disability benefits; but as with proposed cuts to working tax credits, no sooner than it had been announced it was shelved through fierce …

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Six steps to retirement freedom

Six steps to retirement freedom

Retirees have the flexibility to access their pension and do whatever they like with their money, whether it’s buying a new car, going on that ‘once in a lifetime’ holiday, or renovating the home. However it’s important to consider a number of things before you decide what to do. Here are a few rules to think about followed by six steps that will help you discover your personal retirement freedom.

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Why annuities are staging a comeback

Why annuities are staging a comeback

It would be fair to say that annuities have an image problem. When George Osborne uttered the words: “Let me be clear. No one ever needs to buy an annuity again”, many commentators thought it would signal the beginning of the end for a product which can trace its origins back for centuries. However, the market has proved incredibly resilient, with a raft of new developments introduced …

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5 lessons learned in a year of pension freedoms

5 lessons learned in a year of pension freedoms

A year after the pension freedoms came into effect, Retirement Advantage is highlighting the way consumers and the industry have responded, while cautioning that more work is needed to ensure people get advice and shop around to get the best outcomes. Andrew Tully, Pensions Technical Director at Retirement Advantage, commented: ‘The pension freedoms have made people sit up and think about …

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