Pensions: will the life companies play fair on annuities?

To quote "For example, why is it that those who drink and smoke have to pay more for life assurance because of the greater risk to their health – but they are frequently offered a deal no better than a healthy person when they reach retirement and buy an annuity? "

Heavy drinkers and smokers will definately get a higher rate, although they may have to exercise their open market option to do it.

I've not got a particulary sickly client bank, but in the last quater 44% of them got enhanced rates, many of them for drinking and smoking habits.

Pensions = Scam!!

Stephne M = Probably a Daily Mail reader therefore content that immigrants and cancer will have destoryed the world before reaching NRD

State pension funding in the future will be minimal so if the Insurance companies act just like the State, you are on your own and have to provide for your own retirement.

There is an alternative - live life to the full and hope that you die when you retire??

'If the GAD drawing limits were removed this could be very advantageous as income can be drawn as and when and in what quantity require subject to income tax. This of course should only be a tool excerised by the wealthy, but taking them out of the annuity pool should improve the rates, it is up to the regulator to enforce this and the government to take some responsibility in pressurising the FSA in making sure that annuity rates offered are actuarial sound and fair.

State pension funding is to be re-linked with NAE rather than RPI which is a very good move for people drawing a state pension as NAE is on average (although not presently) 2% above RPI. I can only think that John is either referring to S2P becoming a flat rate once LEL reaches the UAP in 2030, or that he is speculating on the future worker/pensioner ratio.

I think that a personal pension variation of the Targeted Money Purchase scheme would be a great product to be introduced. A client could state that they wanted say 60% of income at retirement and pay into an insured product, the contributions and investment returns could then be reviewed annually by the insurance company using perscribed assumtions and appropriate changes to investment stratergy/level of contributions could then be made to give the client the a better chance of retiring with a sufficent income, this of course would not be guaranteed, but I think that it could be of a lot more benefit to many people than the current system of personal pension funding and annuity purchase has become.

"will the life companies play fair on annuities?"

I take it that is meant to be a joke!

I hope rates do go up but we might also have to wait for BoE rates to go up too. It did used to seem very odd that you could lock your savings into different length bonds and get a lot more money from just the interest from the bonds, keeping your capital intact, than you could from buying an annuity.

The new rules do NOT require everyone to ensure that they have a minimum income in retirement sufficient just to avoid purchasing an annuity. This is only a requirement if people are looking for unlimited access to their pension fund. And it would be very irresponsible if the government allowed this WITHOUT ensuring that people had enough to live on before they spend it all.

What is the (MIR) requirement in a DB pension scheme?