MSE News: Annuities code to protect retirees begins

Former_MSE_Jamie · 1 March 2013 at 5:44PM

"A new code of conduct for annuity providers has been launched today ..."

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Annuities code to protect retirees begins

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stinktankcynic · 1 March 2013 at 9:33PM

The only code we need, is to remove the annuity element altogether, the pot is paid out to you over a period of 10-15 years. If you die earlier the balance is paid.
I see no real reason to have annuities, an outdated money generator for the insurance industry. The employer contribution is the only carrot to stop people avoiding money purchase schemes. Also, why on earth can you not have all the cash, especially if you have a full state pension and are above means tests?
The reason, the insurance industry loses, means testing is coming and the government don't want you to be rich.

GhIFA · 1 March 2013 at 9:54PM

stinktankcynic wrote: »

The only code we need, is to remove the annuity element altogether, the pot is paid out to you over a period of 10-15 years. If you die earlier the balance is paid.
I see no real reason to have annuities, an outdated money generator for the insurance industry. The employer contribution is the only carrot to stop people avoiding money purchase schemes. Also, why on earth can you not have all the cash, especially if you have a full state pension and are above means tests?
The reason, the insurance industry loses, means testing is coming and the government don't want you to be rich.

And what happens if you live for more than 10-15 years? Who supports you then?

Value protected annuities allow a lump sum to be paid after your death.

Why can you not have all the cash? You can if you have secure pension income of more than £20k pa. But you seem to be advocating the idea that anyone can take all their fund - again, who supports those who don't have any discipline and drain the fund and spend it at the earliest opportunity with no other income?

Annuities aren't perfect, but they are a lot better than the system you are suggesting.

SallyG · 2 March 2013 at 3:54PM

"Value protected annuities allow a lump sum to be paid after your death."
Does that lump sum payout still depend on your dying before age 75 ....and is it taxed at 55%?

GhIFA · 2 March 2013 at 9:23PM

SallyG wrote: »

"Value protected annuities allow a lump sum to be paid after your death."
Does that lump sum payout still depend on your dying before age 75 ....and is it taxed at 55%?

Yes, it is taxed at 55%