Archive for the ‘Recent Developments’ Category

Pensioners lose £7bn by not shopping around

Wednesday, January 26th, 2011

UK pensioners are estimated to have missed out on £7bn of income in the last decade by not shopping around for the most competitive annuity rate.

pension plan advice that you needThe majority of people coming to retirement with pension funds under £40,000 do not use their open market option (OMO) to find the best source of pension income, a recent survey claims.

According to the survey, those pensioners qualifying for standard annuity rates are estimated to have missed out on £3.8bn and those who were eligible for an enhanced annuity rate because of health or lifestyle issues, like smoking, are thought to have lost £3.2bn.

The issue is quite simple.

People coming to retirement are still failing to shop around for the best annuity rate in retirement, and therefore unfortunately are being consigned to less income for life – despite this being one of the most important financial decisions they will ever make.

Unfortunately it is not as if pensioners can afford to throw away this vital income. The average pension income for a 60 year old male who chooses an annuity paying a level income at standard rates is now just £2,200 – or £42 per week.

Why Should You Consider All Retirement Options?

1.) Declining annuity rates

  • In 1990 a £100,000 pension pot would buy a pension of £15,640 per annum (15.64%)
  • In 2000 the same pot would have bought a pension of £9,120 per annum (9.12%)
  • In 2010 the pot would currently buy a pension of £6,270 per annum (6.27%)

(*figures based on a male aged 65, single life, source DMP financial research experts)

2.) Life expectancy has increased dramatically

  • In 1981 a male age 65 expected to live to 79
  • Today he can expect to live to 87
  • Annuity providers annuity payments have increased 50% due to longer lives

3.) Improved choice of retirement options

  • Annuities have changed offering enhanced & impaired rates but once purchased you cannot changed/adapt.
  • Drawdown has brought true income flexibility, improved death benefits and tax efficiency but there is still market risk.
  • Flexible or variable annuities offer income certainty, improved death benefit, access to market growth while protecting against market drops.

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Don’t let your pension provider ruin your retirement

Sunday, January 23rd, 2011

Get a Free Pension Health Check

Pensionlite advice

I bet by now most people reading this will have already broken their New Year Resolutions.

I have not! Whooooopeeeee. First time ever.

This year I decided to ensure my pension provider will not ruin my retirement and I have done it! Well, in truth I have started the process and I would certainly recommend you do the same.

I have been concerned about my pension for some months but, despite being bombarded by the media about rip off pension charges and awful investment performance, I have done nothing, well it’s ages away isn’t it?.

I have also chosen to ignore statistics that tell I am going to live much longer, that the state cannot afford to look after me in my old age and all sorts of other mind boggling stuff about my finances in retirement. I always thought it would be complicated and anyway how bad could things be.

Why the change of heart you ask.

Two things actually,

I looked in the mirror the other day and was shocked to see my father looking

pension plan adviceback. How did that happen, he retired years ago? I realised I was turning into him and my kids were looking for work and where had the time gone.

The second was getting held up behind some old codger at the petrol station who was blocking my entry. His car had broken down and as I was in a hurry I got out to push him out of the way BUT, I suddenly went all charitable and asked if I could help.

He was a nice bloke as it turned out and I ended up giving him a lift home. Seems he was recently retired and in an effort to match lifestyle to budget had exchanged his family car for this ‘cheaper’ smaller one. He told me not to make the mistakes he had and make sure my pensions were in order.

So how bad could things be anyway?

To save you bothering I did come checking.

Seems it is true that loads of pension plans are expensive, poor performing and do not provide good value for money. Rip off springs to mind.

If you have a personal pension, stakeholder, with profits pension, group personal pension, or money purchase pension you are more likely to be in a bad rather than good one.

pension plans are expensive, My pension is invested in a Balanced Managed Fund. Good enough I though but I found out that in the last 5 years the difference in investment performance between the best and worst of these is more than 50%. Shocked or what.

By this time I had read about as much as I wanted to and was getting it in the ear from my good lady about getting a professional to look at my stuff.

So I went onto Google.

(P. S. I am not as good looking as this bloke AND that’s not my wife either)

looking for pension adviceI found Pensionlite who are specialist independent pension advisers that do everything by post, e mail and telephone. I do hate people sitting in my house telling me what to do, and they are providing me with a Free, Independent and No Obligation Review of my pensions.

They are even going to make recommendations as to how best to improve things on the promise that if what I have got is good they will tell me that as well. That way I am either reassured or will have a plan of action and the good lady will leave me in peace.

Is it complicated?  - In short, no.

I went onto Pensionlite’s web site www.pensionlite.co.uk and left my details so they could call me back. I specified when was convenient and sure enough that’s when they called.

get your free independent pension reviewI explained what pensions I had and with who and why I was concerned. I gave them my plan details and arranged for them to gather information about my pensions.

They rang me a couple of days later, by appointment, and asked me some questions about me and my attitudes so they could make sure my recommendation report was specific to me and my needs.

I did check to make sure I was not expected to pay anything to find out what is what and they assured me that was correct and put it in writing.

The staff at Pensionlite have been very friendly and helpful. They only contact me at times that are convenient to me and I feel like I am being well looked after.

What Next?

My FREE Independent Pension Review and Recommendation Report is being prepared and Pensionlite will call me when they are posting it.

When I have had time to read it and get my good lady to write down some questions I will be speaking to Pensionlite to discuss what they are recommending.

As you can see.

I am feeling relaxed and quite please with myself at the moment and looking

forward to the new year without worrying about my pension.

To get your Pension Health Check underway contact Pensionlite via their web site www.pensionlite.co.uk or by e-mail to support@pensionlite.co.uk or you can telephone them on 01952 279 379.

get your free pension review nowOh, don’t turn yourself into a grumpy old person. Save some cash and have some fun AND don’t let your pension provider ruin your retirement.

Apply now for your free, independent, no obligation pension review and recommendation report and find out what if any actions you need to take to get the most from your pensions.

Pensionlite’s free, comprehensive reports and recommendations are specific to each individual. They are completed by independent pension specialists and include analysis of your investments, charges and other benefits. The analysis results are compared to what is available in the whole of the market, checked against your own needs and aspirations then explained in simple to understand English. Your report will be posted to you for consideration and as all of our transactions are by post, telephone and e mail no one will be visiting you.

You are under no obligation to follow any advice given. If your pensions are good we will tell you and explain why. If they are not we will tell you why not and recommend a course of action to improve them.

It is true that many pensions have high charges and provide poor investment performance so why not find out if these may apply your pension. You have nothing to loose but may have plenty to gain.

Unfortunately we cannot review pensions that you have with your existing employer although we can deal with former employer plans, personal pensions, stakeholders, SIPP’s etc.

If in doubt please ask.

E.mail support@pensionlite.co.uk

Tel. 01952 279 379

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what else is in the pipeline for 2011

Saturday, January 22nd, 2011

For the naughty people who are just not putting any money in a pension the Government are introducing a new compulsory pension arrangement called NEST, National Employment Savings Trust. Compulsory enrolment will be applied to anyone earning above £7,475 per annum unless they are already in a scheme provided by their employers. The new facility will be phased in from 2012 onwards.

Pension advice for 2011There is some scepticism about the NEST arrangements in relation to charges, investment options and suggestions that once the money is in it cannot be transferred or taken out until retirement age.

Under Consideration - Access to pension cash at younger ages

With a view to creating a more tenable pension regime which whilst giving early access to benefits still contains the incentive to save for the future the  government has launched a consultation paper on ways to provide savers with early access to pension funds.

The consultation which will be concluded in February 2011 suggests four options.

  • A loan model allowing individuals to borrow from their pension fund
  • A permanent withdrawal model, allowing access to funds without repayment obligations – possibly in limited circumstances, such as in cases of hardship
  • Early access to the 25% tax-free lump sum currently available from age 55
  • A ‘feeder-fund’ model, creating a more flexible savings product linking liquid savings products, such as ISAs, and pension savings together into a single account.

The paper sets out different models for early access as either a vehicle to encourage saving or a safety net for people needing financial support.

pensionlite are pension advice specialistThere is call for early access to pension funds rather than at the current age 55 to provide support for things like housing, education or medical care, to name but a few.

If you have read this far then you will realise that changes are coming and that you should not be waiting for them to happen but grasping the nettle and taking control of your pension arrangements.

Pensionlite is a specialist independent pension adviser firm which is authorised and regulated by the Financial Services Authority.

Pensionlite provides free independent and no obligation pension recommendation reports dealing with a review of your current arrangements, pension transfer, pension release and retiring now.

Whatever your need we are here to help.

www.pensionlite.co.uk e mail support@pensionlite.co.uk

Tel. 01952 279 379

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Best and Worst Pension Fund Performance

Friday, October 15th, 2010

The best and worst performing individual pension funds over the last 5 years show a massive difference. So do the best and worst performing ‘Balanced Managed Funds’

Best Individual Fund (Bid – Bid price) + 212%

Worst Individual Fund (Bid – Bid price) – 63.87%

Best Balanced Fund (Bid – Bid) + 50.27%

Worst Balanced Managed Fund (Bid – Bid price) -7.53%

Source – Financial Express 15/10/10

In recent weeks the media have been paying particular attention to the charges applied to pension funds but little has been reported about good and bad investment performance so we thought we should find out. As you can see the differences between good and bad is staggering.

To get best value from your pension you need reasonable charges and decent performance. You also need to ensure your funds are invested in a way which reflects your own attitude to investment risk.

A structured investment portfolio will, taking into account your attitude to investment risk, spread your investments across different market sectors and different parts of the world in varying proportion. This is called asset allocation. The higher your attitude to risk the more speculative your investments are. High risk carries opportunity for high returns BUT also a higher risk of losing money. Low risk has little opportunity for real growth BUT offers some stability in troubled times.

When you select an attitude to investment risk you can only ever choose based on your thinking and market conditions at the time. Because circumstances and attitudes change you need to be reviewing your attitude to risk on a regular basis.
We would recommend this be done annually.

In addition, because rising markets tend to increase the proportion of your fund which is equity based this by default increases your exposure to risk. This needs to be addressed by re balancing your fund, we recommend annually, to ensure your investments continue to reflect your own attitude.

Re balancing your fund is a term for adjusting your asset allocation back to the correct attitude to risk and should be done even if you remain invested in the same individual investments within your pension portfolio.

Reviewing your plans annually also provides the opportunity to switch some funds about if the performance has not lived up to expectation.

For simplicity and sometimes regulatory reasons many high street branded pensions have been sold with the investments selected by default in to Managed Funds. You may have been asked to select between a Cautious, Balanced or Adventurous but that is probably as far as the adviser was authorised to go.

Unfortunately these managed funds have tended to perform poorly and as our research indicates with massively different degrees of success.

To make matters worse the volatility and risk rating of many of these Managed Funds is not reflected in the title.

Further research, using information from ‘Financial Express’, indicates that on a risk rating of 1 – 10 with 1 being low and 10 being high the majority of ‘Balanced Managed Funds’ have, over the last 3 years, been rated as 8, 9 or 10.

If you are concerned about your investment returns or the risk rating of your investments you should get your pensions reviewed by an independent pension specialist as soon as possible.

Pensionlite provide free, independent, no obligation pension review and recommendation reports. Why wait – www.pensionlite.co.uk

The best and worst performing individual pension funds over the last 5 years show a massive difference. So do the best and worst performing ‘Balanced Managed Funds’

Best Individual Fund (Bid – Bid price) + 212%

Worst Individual Fund (Bid – Bid price) – 63.87%

Best Balanced Fund (Bid – Bid) + 50.27%

Worst Balanced Managed Fund (Bid – Bid price) -7.53%

Source – Financial Express 15/10/10

In recent weeks the media have been paying particular attention to the charges applied to pension funds but little has been reported about good and bad investment performance so we thought we should find out. As you can see the differences between good and bad is staggering.

To get best value from your pension you need reasonable charges and decent performance. You also need to ensure your funds are invested in a way which reflects your own attitude to investment risk.

A structured investment portfolio will, taking into account your attitude to investment risk, spread your investments across different market sectors and different parts of the world in varying proportion. This is called asset allocation. The higher your attitude to risk the more speculative your investments are. High risk carries opportunity for high returns BUT also a higher risk of losing money. Low risk has little opportunity for real growth BUT offers some stability in troubled times.

When you select an attitude to investment risk you can only ever choose based on your thinking and market conditions at the time. Because circumstances and attitudes change you need to be reviewing your attitude to risk on a regular basis.
We would recommend this be done annually.

In addition, because rising markets tend to increase the proportion of your fund which is equity based this by default increases your exposure to risk. This needs to be addressed by re balancing your fund, we recommend annually, to ensure your investments continue to reflect your own attitude.

Re balancing your fund is a term for adjusting your asset allocation back to the correct attitude to risk and should be done even if you remain invested in the same individual investments within your pension portfolio.

Reviewing your plans annually also provides the opportunity to switch some funds about if the performance has not lived up to expectation.

For simplicity and sometimes regulatory reasons many high street branded pensions have been sold with the investments selected by default in to Managed Funds. You may have been asked to select between a Cautious, Balanced or Adventurous but that is probably as far as the adviser was authorised to go.

Unfortunately these managed funds have tended to perform poorly and as our research indicates with massively different degrees of success.

To make matters worse the volatility and risk rating of many of these Managed Funds is not reflected in the title.

Further research, using information from ‘Financial Express’, indicates that on a risk rating of 1 – 10 with 1 being low and 10 being high the majority of ‘Balanced Managed Funds’ have, over the last 3 years, been rated as 8, 9 or 10.

If you are concerned about your investment returns or the risk rating of your investments you should get your pensions reviewed by an independent pension specialist as soon as possible.

Pensionlite provide free, independent, no obligation pension review and recommendation reports. Why wait – www.pensionlite.co.uk

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Making the most of the pension pot you have

Thursday, October 14th, 2010

If in these recessionary times, with austerity measures still to be announced, you are wondering if you can afford to maintain your pension contributions you should get your pension reviewed to see if you can make more of what you have already accumulated.

Reducing charges and obtaining better returns can make a massive difference to the value of what you have already saved.

If you have high charges and poor returns then the result of stopping or reducing contributions may mean that your pension pot reduces rather than stands still.

Many of our clients are not paying into their pensions but are still seeing considerable growth from their investments.

For a free, independent no obligation review of your pensions log onto www.pensionlite.co.uk or call 01952 279 379.

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Treasury cuts annual pensions allowance to save £4bn

Thursday, October 14th, 2010

The Treasury has announced the annual pensions allowance will be lowered to £50,000 and the lifetime allowance will drop to £1.5 million, in a move that will save £4 billion a year.

The annual limit has been slashed from its current level of £225,000 to £50,000 while the lifetime pension limit has dropped from the current £1.8 million level.
The Treasury estimated that the cut would hit 100,000 consumers of which 80% earned more than £80,000 per annum.

The Treasury noted it was able to offer a higher annual allowance than the £30,000 or £45,000 proposed in consultation by also cutting the lifetime allowance.
For the average person contributing to pensions these changes will have no impact at all.

The £4billion saved by the government is simply the tax relief that high earners contributing large sums to pensions have been receiving.
The Treasury stated:-

‘We have abandoned the previous government’s complex proposals and developed a solution that will help to tackle the deficit but not hit those on low and moderate incomes.

We have taken a tough but fair decision,’ said Mark Hoban MP (pictured), financial secretary to the Treasury.

The Treasury will also allow pension savers who exceed the annual allowance due to one-off spikes in contributions to offset this against unused allowance from previous years.

The reduced annual allowance will kick in from April 2011 while the new lifetime allowance will take affect in April 2012. The Treasury also plans to consult in November on options to enable people to meet the tax charge out of their pensions.

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Thousands Reclaim Lost Pensions

Wednesday, October 13th, 2010

Lump sums of more than £20,000 have been returned to people who have lost track of their pension provision.
During our working lives we may well change our jobs, houses and even partners. When we do this we often forget to inform people and institutions of the change. As a result people who want to find us or send information can’t.

This is very often the case with Pensions but all is not lost.

All Pensions are linked to your National Insurance number so can be traced.

Pension LiteThe results can be quite staggering. Recently we assisted a lady who had worked in a bank in the late 1970’s. She thought she had a few years pensionable service but had lost contact. Could we help? We assisted her in tracing the pension and discovered it was worth a staggering £143,000. As she was over age 55 she was able to access some of her benefits and in her words ‘it changed my life’.

More than 350,000 people have used the government’s free Pension Tracing Service since it was launched in 2005 but many don’t know it exists. The system uses a database of information from 200,000 pension schemes to match people to their previous investments.

A survey of 2,000 users of the service found that, as a result, 5% received weekly payments of more than £100 and 7% got a lump sum of more than £20,000.
If you are over age 55 you can usually access pension benefits from old paid up schemes and tracing additional pensions you thought you had lost could seriously help your finances.

Irrespective of your age you may wish to trace these pensions and get them under your control. We can help. We can assist you in tracing your lost pensions and then review them Free of Charge, Independently and Without Obligation. www.pensionlite.co.uk.

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Do Balanced Managed funds provide ‘Balance’

Tuesday, October 12th, 2010

Some analysis we carried out today, indicates that so called Cautious and Balanced Managed Funds are not doing ‘what it says on the tin’.

Our data was drawn from Financial Express Analytics.

We looked at the volatility and returns of Balanced and Cautious Managed Funds over the last 3 years using a Risk Rating between 1 & 10. 1 being low volatility and 10 being high.

A medium risk attitude to investment, using a scale of 1 to 10, would normally be rated either a 5 or a 6.

A cautious attitude to investment risk would, using the same scale, be rated a 3 or a 4.

Of all available ABI Pension Balanced Managed Funds the vast majority were risk rated 8, 9 or 10.

Way above a medium attitude to investment risk.

Of all available ABI Pension Cautious Managed Funds the vast majority were risk rated 5, 6 or 7. Some were actually rated 8, 9 & 10.

Way above a cautious attitude to investment risk.

Are your funds invested in line with your attitude to investment risk?

The investments within your pension fund should be structured to take advantage of the good times and protect you against the bad.

The individual investments need to form part of a portfolio which has been selected to reflect your own individual attitude to investment risk otherwise what you think is happening may be dramatically different to reality.

As an example, if you assume that risk rating should be done on a scale of 1to 10 with 1 being very cautious and 10 being adventurous then common sense says that if you are a medium risk you would be rated a 5 or a 6 and have a balance attitude to investment risk.

Remember that your attitude to investment risk is a question for now. You should be able to move your funds at any point to reflect a change in your attitude, world markets and even your circumstances. We would expect to confirm attitude to risk with our clients once a year and amend or change strategy as well as re balance investments taking advantage of free switching.

With a balanced attitude to investment risk you would assume that your money would be spread across the world markets and invested in a mix of things like cash, fixed interest, government bonds, emerging companies and equities.

This balance is achieved by deciding on an asset allocation. Quite simply how much of your money should be invested in where and in what proportion.

Our analysis indicates that most of the Cautious and Balanced Pension Managed Funds, containing 100’s of millions of £’s, are invested in a far riskier way than the investor expects.

How are your funds invested?

Probably best to find out.

www.pensionlite.co.uk

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