‘Equitable Life’ Articles
Written by richard on 08 March 2010
An amazing £135 billion of retirement fund fund money is due to mature over the next few years as the BabyBoomers move into retirement. However, thousands of these Pension Investors are short-changed because they miss out on the best available pension advice.
With your Retirement Pension Options you should consider carefully what decisions you make sooner rather than later and of course remember that your Pension Options are often fixed in place once the decision is made.
You could start with the Retirement Options Manual which outlines available alternatives for your Pension.
By altering your pension savings into an income you are making one of the most important financial decision you will ever make. Nearly all company pensions will provide a Pension income routinely, but those with personal pensions and some types of employer schemes must turn these funds into an annuity or similar our Best Pension Annuity Rate service will help you find the most suitable product for you.
Retirement isn’t like buying car insurance, where you do it every year and build up expertise. Everyone’s doing it for the first time – and there is no second chance if you get it wrong. Which is why you need to consider your Pension Options.
So what you can you do to improve your situation.
Looking ahead
I suggest you start to look at your plans some 12 months ahead of the big day (retirement). You will need time to consider carefully the options. Over here at the financezone we have produced a guide to your retirement options which is available for download at nominal cost (if you decide take advice from us we will refund you the purchase price in full) however it could save you many thousands of pounds if you wanted to DIY.
The very latest time to consider your Retirement Pension Otions is about 3 months before your retirement date.
Using these deadlines (12 and 3 months) will give you time to gather information, bring together fund valuations and see how your personal pensions will complement State and workplace pensions.
In most cases, those with a personal pension will end up using the fund to buy an annuity from an insurer, exchanging capital for a guaranteed lifetime income. Our Best Pension Annuity Rate service will help you find the most suitable product for you
But savers must be on the ball, especially those with older pensions that have generous guaranteed annuity rates noting of course these are becoming fewer as years go by. However you must check,
Shop around
Many Pension Investors are not aware they do not have to buy a pension from the company that has managed their money up to retirement. Instead, they can use the open market option to find a better deal with another provider.
Tracking down the best rate can boost your income by as much as half for the rest of your life and remember it is only an Independent Financial Adviser that is able to advise you from all of the providers in the market place and of course provide Impartial Financial Planning Advice.
Usually annuity rates can vary greatly, and often by 10% or more, the actual rate offered depends on many things and often how keen an insurer is to win new business. There are some other reasons why some of you should consider shopping around.
‘Enhanced’ annuities pay better rates to those who have a shorter than average life expectancy. You might be eligible for an enhanced rate because you have been a smoker, for medical reasons, or even because of your postcode.
These are all outlined in the Retirement Options Manual which outlines available alternatives for your Pension.
To put it bluntly, if you are likely to die younger than others you could be getting more income from your Pension at retirement.
Smokers, those of you with health problems, even heavy drinkers and if you are living in certain postcode areas could qualify for a better annuity rate.
Consider the future
An pension bought now may continue for 30 or 40 years, but the income you get is dictated your personal circumstances at retirement.
One option is a fixed-term annuity. This allows you to secure an income for five or ten years then receive a lump sum back to reassess your options.
These work like this, you health could worsen between age 65 and 75 and you might then qualify for an enhanced annuity rate, changing circumstances may also help you get a better rate, e.g. death or divorce means they no longer need to provide for a spouse’s or partner’s income.
There are risks with a temporary annuity, though. Changes in financial markets mean that annuity rates could tumble. This could mean that when the plan matures, your lump sum is not sufficient to replace your existing income.
Another option might be to invest in an annuity that will increase over time. You can buy an index-linked policy that rises with inflation, or one that rises by a set rate each year, but in both cases the starting income will be lower than a conventional level annuity.
There are also investment-linked annuities where the income will be influenced by how stock markets increase over the next few decades. But there is the risk that if markets slump, so will your retirement income.
Do your homework
Before you make the final decision you should consider your options carefully and discuss these with your Spouse and Partner, after a review by an Independent Financial Adviser.
Annuities are not the only choice for those retiring. Opting for an unsecured pension (USP) allows savers to take tax-free cash but leave the rest of the fund invested in stock markets. You can then draw an income from this fund, hoping that market growth replaces the capital you have taken.
A USP can run until age 75, appealing to those who want to work part time in retirement, but it is risky and expensive. Advisers say it typically takes a fund of at least £100,000 to make the sums add up. Advice is essential.
And you do not have to put all your eggs in one basket. You could choose to mix two different types of annuity, perhaps blending a fixed and a rising income.
Whatever you finally decide it is important you understand the decisions made in the lead up to your formal retirement will have an impact for many years. Therefore the lead in time to your final decision is critical.
I have produced a more in depth guide to your Retirement Options which is available for download. There is a small charge for this guide which is full refundable should you decide to take your formal planning advice from ourselves. You can of course contact me here, or call on 0845 226 9106
Richard Smith
http://www.thefinancezone.co.uk
Posted in Best Savings Account Rates, Equitable Life, General Financial News, Investments, News - Updates, Pensions - News | Comments Off
Written by richard on 23 February 2010
Pension Planning:
Over the past couple of weeks I have been inundated with a enquiries on two subjects relating to Pensions, and felt it would be worthwhile providing a bit more comment for you here.
Pension Charges
During recent years Pension Charges have fallen dramatically, gone are the days of old where a Pension Provider charged:-
A monthly plan fee (I have seen these as high at £5.00 per month)
An Initial Charge on Contributions – usually 5% as a minimum and can be as high as 80% during the first few years.
Ongoing Charges of 1.5% – 3.5% of the Fund Value
If we compare these with a modern Pension Contract with a single charge of 1.5% of the value of the fund initially you will understand why I urge everyone to review their plans.
Investment Fund Choices
Here is another ‘bug bear’ of mine. For many years clients only had one or sometimes 2 choices of pension fund. With Profits or Managed both of which were only just about acceptable.
During the 90’s things began to change with a far wider choice of funds being made available for individual investors to choose from.
It is now the norm for most modern pensions to have 50, 60 or up to 90 different funds available under a conventional pension plan. Now I am not saying that you should invest in this number of funds, but it does give you an extensive choice, which means your pension can be invested based on your needs and wishes and in accordance with your actual risk profile.
Now I can absolutely guarantee you, that if your plan is on one of my list of pension providers you will be invested in one fund only, this investment will not have been reviewed for many years and the overall performance will be well below expectation.
Rubbish Pension F A Q
Even when you call your provider for further information or guidance you will find that do not want to offer any help or unable to.
Thing is I am not psychic, but as an Independent Adviser having carried out thousands of Pension Reviews I have spotted a clear pattern.
Richard Smith
Abbey Life Plus Pension Review
Tags: Abbey Life, Hill Samuel, Pension Fund Choices, Pension Funds, Pension Planning, Target Life
Posted in Abbey Life, Equitable Life, News - Updates, Pensions - News | Comments Off
Written by richard on 15 February 2010
Fund research – As you may, or may not be aware, when researching the funds for the database I ignore the latest trends, new funds and “star” managers, and concentrate on analysing the actual performance achieved. So when attempting to pick the top performing funds it is refreshing to find an Investment Adviser that is getting it right.
Trustnet recently published their list of 122 “Alpha” managers, i.e. the managers who add real value to the investment process (list attached). Having checked the top managers on their list against my recommended funds it is nice to know that our clients money has 12 of the top 15 managers looking after it.
Now you can choose to take Investment from anywhere, but before you do ask the right question. My clients have and I can prove it.
Richard Smith
Posted in Abbey Life, Equitable Life, General Financial News, Home Buyers, Important, Investments, NPI News, Pearl Pension, Royal Sun Alliance, Scottish Provident, Windsor Life | Comments Off
Written by richard on 18 January 2010
More Ways To Find Out If You Have a Duff Pension Plan And The Action You Can Take To Solve It.
Over the past couple of weeks (yup I know we have just come past Christmas) I have been speaking to more and NPI Pension Owners. This is good news because many have been sadly lacking in advice for some time.
I have produced a list of Poor Pension Providers and these are here. Please fee free to look around the list and contact me should you wish to discuss (informally) any of them.
Abbey Life Pensions/Pension Planning Risk Profile/Investment Funds
For those of you that do not know me, I am a Pensions Expert, with a particular dislike of some of the poorer pension providers in the market place. My Abbey Life Pension Pages are here. And there is an option to find out some further information on this page.
This brief summary is an outline of one of the really big pitfalls and where most Financial Advisers/Banks and Building Society Advisers get it V E R Y wrong. Just look at what some Financial Advisers have been saying on one of their own forums.(Please note this is an external link)
Asset Allocation Rule – Don’t put all of your (investment)Eggs in one basket(or managed fund).
One of the vitally important parts of any Investment Planning (and this includes Pensions) is the correct Asset Allocation.
An explanation is below.
“The process of dividing investments among different kinds of assets, such as stocks, government bonds, property and cash, to optimize the risk/reward trade off based on an individual’s or specific situation and goals. A key concept in financial planning and money management” explained by Investor Words.com
Now even with some of the poorer Pensions Providers in the market place there is a range of available investment funds, however the quality of the advice received initially is often limited and usually there is only one fund chosen. For many of you with these Pension Plans (see list) Have a look at your own Pension Statement, one or two funds within the fund could indicate a poor deal indeed.
Your Provider may not have a range of funds that are remotely usable and this is often the case.
Which of course means that the Asset Allocation rule cannot be used correctly in any instance.
Lets consider the reasons behind this rule – Investment Risk.
There is no right or wrong level of risk; it is just personal preference. An acceptable level of risk to you may be unacceptable to others. As a rule of thumb, the higher the potential returns the higher the risk.
Your attitude to risk may change throughout your life and you should review your investments as this happens.
There are five main types of investment risk are:
Market risk – the risk that market-linked investments lose value when markets fall
Interest rate risk – the risk that investments will lose value when interest rates rise
Inflation risk – the risk that your investment will not keep pace with the cost of living
Credit risk – the risk that the provider may not be able to meet their obligations
Currency risk – the risk that your investment may be affected by changes in exchange rates. The level of investment risk your money is subject to increases if either, you invest in a single type of share, a limited geographical area or a specific part of the economy.
When I am making Pension Investment recommendations the above rules are used as part of the decision making process.
So how does this fit in with your current Pension Plan.
Has your adviser provided you with a range of funds to invest in?
Does your Pension provider even have a range of suitable funds to invest in (not forgetting issues like charges and administration standards)?
If you do have a range of invested funds when was the last time these were reviewed?
I fully understand that you would like some further informatin which is why I have produced a free report and outlining some of the issues here.
Please contact me when you require some further advise, or consider downloading our Pensions Review document, a free report outlining the important points.
Richard Smith
0845 226 9106
Similar Links
Abbey Life Pension Review
Free Pension Review
High Charge Pensions
Tags: Abbey Life, Colonial Mutual Pension, Home Buyers Guide, Investment Planning, Investment Returns, NPI Pension, Pearl Assurance, Pension Transfers, Poor Investments, State Pension, Windsor Life, With Profit Bonds
Posted in Abbey Life, Equitable Life, NPI News | Comments Off
Written by richard on 05 January 2010
It is quite amazing to me that the regulator, the Financial Services Authority, has allowed the biggest single sector of the UK investment market to end up in a big mess mess.
When considering With-Profits investments, and finding the correct advice via an Investment Adviser both as a concept and in reality, should be simple, however is often completely fudged by providers (Life Assurance Companies).
Despite the obligation for With-Profits providers to publish a PPFM (Principles and Practices of Financial Management) it is still often impossible to uncover all the relevant facts and figures. The PPFM documents themselves are often crammed with impassable terminology and detail and, like With-Profits in general, appear designed to make things as unclear as possible. It is also interesting to note that many Investment Advisers also still get it very wrong.
The approach of many With-Profits companies with regard to transparency is often nothing short of appalling, and is in direct conflict with the FSA’s “Treating Customers Fairly” initiative.
It is hard to believe that in the modern investment world With-Profits still plays such a large part. It is clear that the concept of With-Profits has been mis-sold, allowing Insurance Companies and their sales people to present With-Profits as something it is not (not all IFA’s are wholly innocent either). With-Profits has undoubtedly regularly been sold as a direct alternative to deposit accounts.
There remains somewhere in the region of £300 billion invested in With-Profits, many are trapped by redemption penalties (often called, MVR’s, MVA’s etc.) but the funds themselves continue to deliver appalling results.
However, a small minority of providers (Step forward – Prudential, Aviva, LV= and Wesleyan) have achieved positive and very acceptable results for their plan holders. These companies aren’t rocket scientists, they simply applied the original principles and benefits of with-profits, not chasing market trends and fashions, and investors with these companies are likely to be pleased with the results. Although there are another few companies who have achieved, at best, reasonable returns, somewhere in the region of 40% of all With-Profits investors are in funds that are doomed to underperform substantially in the future.
One of the many contradictions for With-Profit investors is that those in good plans with good companies, achieving good results, are likely to be in a position where redemption penalties (MVR’s, MVA’s, or some other element of the With-Profiits alphabet soup) do not apply, and they can move out of the fund quite easily. Sadly, this is another opportunity for the unscrupulous sales person to lump all With-profits funds under the same umbrella. In a nutshell, the poor funds usually have the highest penalties, the good funds often have no (or very low) penalties.
Yet another contradiction is that the good funds, with the best results, are usually those that have the highest asset allocations in shares and property which, ironically, makes them more vulnerable to market downturns and less suitable for the cautious investor that they are aimed at. Help !
If you have a With-Profits based investment, or are considering investing in one, take advice now and of course I will be pleased to help.
The reality is these investments are often not what they seem and there are a lot of lazy Financial Advisers out there that continue to use what in the modern world is clearly a little out of date.
Over here I pride myself on making sure that all investments fit completely with your overall Risk Profile and use an Independent System (that has been tested) in order to ensure my recommendations fit.
Richard Smith
0845 226 9106
You can contact me here
Related Links are below.
Abbey Life – Poor Pension Providers
Poor Pension Providers – Free Review
With Profits – Investment Advisers
Tags: Abbey Life Pension, Investments, Pearl Assurance, Pension Transfers, Scottish Provident, With Profit Investments
Posted in Equitable Life, General Financial News, Investments, Pearl Pension | Comments Off
Written by richard on 28 December 2009
The self employed rapidly becoming marginal in the world of pensions , under-provisioned and not seen by most recent governments and political parties, many it seems will arrive at pensionable age with very little income..
There are a couple of issues facing the self employed face when building up a retirement pot.
They are entitled only to the Basic State Pension, whereas employees manage to obtain both the Basic State Pension and an additional earnings related scheme now known as the State Second Pension (it was known as SERPs). The overall limit is capped at £151 per week (2008/09 Tax Year), which is equal to just over £7,800 a year.
Today (December 2009)the Basic State Pension is currently £95.25 per week or £4,953 per year. This is somewhat below poverty line levels and whilst anyone without private savings would be eligible for Pension Credit (provided of course this remains in place) which would take their income up to £130 a week (£6,760 per year) this is still not going to provide any kind of standard of living to aspire to. So the state isn’t giving much to the self employed and is only giving a little more to the employed).
Another issue they face is that by definition they don’t have an employer’s pension scheme on offer. In company pensions the contribution rates are typically split two thirds from the employer and one third from the employee, so the absence of an employer contribution makes a big difference. When it comes to contributions to private pensions, the self employed are lagging behind again. Even the attitude from the UK treasury via the Inland Revenue seems to be against the Self Employed.
The final outcome is that the lack of state or employer pension support means that the self employed are at risk of spending retirement with very little there is also a more than outside chance that they will be working long than planed.
For many self employed there is the option of selling the business at retirement and the cash from sale making up for the shortfall in conventional pension planning, however try selling a local firm of Plumber’s or Electricians and you will find the world not really being that interested. The same also applies to Freelance Journalists and a range of other occupations.
One of the first rules of investment planning is of course not to put all of your eggs in one basket and of course this applies to your business along with conventional stocks and shares.
I strongly recommend in the first instance you consider carefully the level of state support in relation to your Pension, and you can do this here.
You do have some choices, and planning is of course needed sooner rather than later.
In the first instance a review of your existing plans will be the starting point, and then some further reviews of the rest of your business planning and the making of a Retirement Plan in order to ensure your retirement is financially sound will be the best way forward.
Richard Smith
0845 226 9106
Related Links
Abbey Life Personal Pension Reviews
Allied Dunbar Pension Reviews (plus some others)
High Charge Pensions
Pension Survey Please Help
Tags: Abbey Life Pension, Barclays Life, Colonial Mutual Pension, NPI Pension, Pension Transfers
Posted in Abbey Life, Equitable Life, NPI News, Pearl Pension, Royal Sun Alliance, Scottish Provident, Windsor Life | Comments Off
Written by richard on 24 November 2009
I have been busy of late helping many of you with very poor pension providers. Doing the things that they should be doing for you, and with this in mind I have just published a mini article which you may find of interest.
The link to this is here >>
Richard Smith
0845 226 9106
For those of you with Personal Pensions With Natwest or other High Street Names you may want to see this post.
Or any one on this list (Abbey Life Pensions included)
My Free Pension Report is still available
Tags: Abbey Life Pension, Investment Planning, Mortgages Advice in Copthorne Crawley and East Grinstead, NPI Pension, Pearl Assurance, Pension Transfers
Posted in Abbey Life, Equitable Life, NPI News, News - Updates, Pearl Pension, Pensions - News, Royal Sun Alliance, Scottish Provident | Comments Off
Written by richard on 10 November 2009
Equitable Life Personal Pension Plans Some further Guidance Richard Smith – Independent Financial Adviser
Following some further work I have carried out for some policy holders of Equitable Life Pension and Investment Plans I am pleased to provide an overview and a brief guide to your options.
Equitable Life closed to New Business in 2000, prior to this they were not one of the greatest providers of Investment and Pension Products, investment performance was just about acceptable, and the level of charges within the plans was on the high side of higher than average, but certainly not the worst.
If we compare the find information and statsistics (source FT.com/Lipper) you will see that the overall level of Ranking (this source Lipper) puts Equitable Life somewhere between 1 and 2 based on a good score of 4 or 5. This is based on the Managed Fund Performance. There is similar data and supporting evidence for the rest of the Equitable Life Funds.
Other reasons to consider:-
Charges – Most of the Equitable Life Pension Plans reviewed by us in recent months carry a policy fee (a monthly non refundable fee) of £3.00 per month, however we have seen some of these as high as £5.00 per month or more.
When compared with a modern Pension Contract these charges are certainly not the norm.Very few providers now charge a policy fee at all – likely saving £40 per year or so (x 20 years £800 give or take a few pennies).
What about other charges? There are many that may apply and these are dependent on the specific contract,
some of these are outlined below.
Equitable Life Pension Contracts made great play of Capital Units on some of their contracts. These are designed to confuse and obfuscate the real level of charges within a Pension Plan
Capital Units which were commonly used by many Life Assurance and Pension Providers during the 70’s and 80’s are now virtually outlawed by the regulator and certainly would not be allowed to be used in a modern Pension Plan.
Capital Units could account for up to 80% of your first 5 years Pension Contributions which of course means you will have suffered guaranteed losses on these plans during this period, combined with poor investment returns you could expect your retirement to be substantially worse with a plan that levies Capital Units.
There are of course a range of other charges levied on your fund, Bid Offer Spread paid on new investments (every premium you pay will have this charge levied) in the main it is usually around 5% .
As the Business is now operated as Closed Fund we can expect the investment performance to start to worsen as the Funds Under Management Contract. A small fund, and reducing is harder to manage than a large investment fund.
Do you want me to go on more, look the reality is this Equitable Life are one of the poorest performing, highest charging Pension providers in the UK. There some others that also need to be considered but that is not for here.
By taking some action now you could be increasing your Pension at Retirement by several thousands of points (often 10’s of thousands) by moving your plan to another provider, reducing charges and increasing investment performance. Potentially the direct cost you will be nothing, importantly there
You will also benefit from a more flexible contract along with a good level of advice from ourselves – Independent Financial Advisers.
The initial cost to you for a formal review of your Pension Plan will be Nil or Nothing. We need to fully review the plan before we can provide any advice in any case, this is always Free Of Charge.
I promised not to go on and on about Equitable Life Pension, however they are SO bad, and they really don’t care about you, if they did they would do better.
Please contact me today for a formal review of your options, no charge or obligation.
Please use the form below to obtain some details, to send me an email click here.
Free Pension Review
A list of Poor Pension Providers (Including Equitable Life)
High Charge Pensions
For further information without obligation please use this box below and we will email you some important information and our Free Pension Report. We hate spam more than, therefore do not share or loan your details with any third party provider.
Tags: Abbey Life Pension, Barclays Life, Colonial Mutual Pension, Equitable Life Pension, Pearl Assurance
Posted in Abbey Life, Equitable Life, News - Updates | Comments Off
