Annuity rates ‘have gone into freefall’: Money-printing triggers slump - and it may g

Gracchus_Babeuf

ILW wrote: »

CML quotes around 11 million mortgaged properties.

Population around 65 million.

That does not mean most people have a mortgage.

That does not even mean most families (ave 3.5 people) have a mortgage.

Meaningless. The working population of the UK is around 32 million (http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/september-2012/statistical-bulletin.html). And given that most mortgages are joint, then we can assume that at least half of the working population has a mortgage.

Of course, when I said 'most people' I meant most people of working age, and given that most children are dependent on working parents, then we can safely assume that the majority of the UK population lives in a mortgaged house.

ILW

Gracchus_Babeuf wrote: »

Meaningless. The working population of the UK is around 32 million (http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/september-2012/statistical-bulletin.html). And given that most mortgages are joint, then we can assume that at least half of the working population has a mortgage.

Of course, when I said 'most people' I meant most people of working age, and given that most children are dependent on working parents, then we can safely assume that the majority of the UK population lives in a mortgaged house.

ONS quotes 26.3 million households in the UK.

11 million mortgages does not cover "most".

Gracchus_Babeuf

ILW wrote: »

ONS quotes 26.3 million households in the UK.

11 million mortgages does not cover "most".

I was referring to people, not households. Anyway, whatever the exact number, it's a very large number of people. Most who are mortgage free are either the retired or the wealthy - why should their interests be put first when there are millions of ordinary people struggling to get a decent life for themselves and their families?

RUN_RABBIT_RUN

purch wrote: »

You won't get any of those.

So far this thread has revealed that, "many are drowning in debt", that raising base rate to 5% would "cause a meltdown in the banking industry", and that "Most people have mortgages" or on the other hand "Most people don't have mortgages"

........such is the MSE Forum World :eek:

come on purch, you're beginning to sound like you're not enjoying yourself

ILW

Gracchus_Babeuf wrote: »

I was referring to people, not households. Anyway, whatever the exact number, it's a very large number of people. Most who are mortgage free are either the retired or the wealthy - why should their interests be put first when there are millions of ordinary people struggling to get a decent life for themselves and their families?

I assume the roughly 50% of the population who rent do not exist then.

globalds

ILW wrote: »

I assume the roughly 50% of the population who rent do not exist then.

Why let facts ruin a good discussion ?

kabayiri

It's undeniable that annuity returns are not what they were.

It seems the BTL proponents are right. If more of the upcoming generation are going to be renting for longer, doesn't this suggest that being a BTL landlord looks like offering a solid return ? The pressures on housing won't be going away any time soon.

Excuse me a few minutes, I'm just off to rightmove

C_Mababejive

Annuities..pah...what a scam. Who on earth would give all their riches to some insurance/investment co to keep only for them to meter out a paltry sum? Best to take charge of your own investments and keep your capital.

michaels

<Time for some facts>

Why let the facts intrude:
Imagine your pension fund is invested in guilts (quite likely if you are nearing retirement). QE pushing down yields = QE increasing prices (for a bond price and yield are filp sides of the same coin) so any impact QE has on bond prices also increase the value of the fund - thus net impact on annual return (annuity) = 0.

QE also helps to support the prices of other asset classes such as shares (and dare I say it property) - just the sort of assets that those in retirement are typically 'long' thus QE does just as much good for these people as it does harm.

Now please back to the enlightened discussion.

</Time for some facts>

System

michaels wrote: »

thus net impact on annual return (annuity) = 0.

Sounds convincing, you way you put it, but is that what people are actually experiencing?

The man who complains that his pension pot last week would have bought a much higher annuity than it will today has overlooked the fact that his pot has surged in value in the same period?

If the net effect is NIL why do advisers keep warning of the risks of delaying purchasing an annuity because rates might fall even lower, or on the other hand might recover and it would be better to wait?