Annuity Business

SallyG

http://www.ft.com/cms/s/0/d94c295e-4e8f-11e1-ada2-00144feabdc0.html#axzz1lbGcoYBc


Joanne Segars, chief executive of the NAPF, said: "The annuity market desperately needs to be straightened out.
"People are saving throughout their working lives only to end up short-changed by a toxic system."


Read more: http://www.ifaonline.co.uk/ifaonline/news/2143849/napf-proposes-national-annuity-brokerage#ixzz1lbMLGgHF

http://pensions-institute.org/reports/TreatingDCMembersFairly.pdf

atush

Just as well there is no need to buy an annuity any longer?

SallyG

Do you think annuities will just die a natural death - will anything replace them as guaranteed pension income?
Will there be no guaranteed pension income outside final salary/defined benefit schemes?

SallyG

Apparently not dying?
http://pensions-institute.org/report...bersFairly.pdf
"The UK has one of the largest annuity markets in the world and it is growing rapidly. Currently it is worth £12bn per annum in terms of annuity sales. Estimates vary but one source expects the market to double within three years. Despite this growth, there is a trend towards business concentration in the hands of four or five standard annuity providers plus a similar number of enhanced annuity providers. We were not able to obtain data on market share from many companies but we understand that the major scheme and annuity players, in alphabetical order, are Aegon, Aviva, Friends Life, L&G, and Standard life. These companies probably account for about 70% of the market in terms of business sold this century. Also significant are Axa, Scottish Life and Scottish Widows. Canada Life, LV= and Prudential said that they do not sell new group DC schemes. Not all providers that operate in both markets compete in the open market. We stress that the market is changing rapidly at present."!!

dunstonh

"The UK has one of the largest annuity markets in the world and it is growing rapidly.

Logically, it would do. Personal pensions only came into existence in 1988. Before that personal schemes were aimed at the self employed and those without occupational schemes. So, you are seeing those that started in the 80s and early 90s coming online to take benefits and that will increase until alternatives become more mainstream.

I have already made comments on this report on the other thread covering it. So, wont repeat.

Proxy

They missed Just, who are the second biggest providers of annuities on the open market.

dunstonh

Proxy wrote: »

They missed Just, who are the second biggest providers of annuities on the open market.

In a month or two we will probably hear what other flaws the research had once the ABI or providers have taken a look at it.

Missing off Just Retirement is crazy. But then so is including AXA in your list as well as Friends Life (for those not aware, AXA sold their UK life book to Resolution in 2010. Friends Provident and the AXA book were rebranded under the Friends Life brand. AXA do not retail pension annuities. So, saying they are significant is strange).

jamesd

SallyG wrote: »

Do you think annuities will just die a natural death - will anything replace them as guaranteed pension income?
Will there be no guaranteed pension income outside final salary/defined benefit schemes?

Annuities don't guarantee after inflation income either. The most common type sold is single life level (meaning no inflation increases at all) but even the inflation-linked types have caps on the level of inflation that they will increase at.

If you want guarantees of similar quality you can buy bonds within the pension with staggered maturity dates and use the fixed in advance buy-back price at maturity for income. You can buy inflation-linked gilts if you want UK government backing, low income levels and some inflation protection.

SallyG

http://www.telegraph.co.uk/finance/personalfinance/pensions/9074072/Pensions-have-been-destroyed-says-former-City-Minister.html

"Under Lord Myners’ plan for the Government to get involved in defined contribution schemes, people would buy their annuity from the Treasury’s Debt Management Office (DMO), which runs the debt and the cash management for the Government.
The DMO would insure the risk and provide an annuity through National Savings & Investments, the Government agency. The pension payments would be made through the Post Office.
He said that the move would give the Government cash flow and it would give savers security."