Abstracts » Business

Pensions investment dilemma

Article Abstract:

With-profits funds are available for United Kingdom investors using income drawdown schemes. These schemes allow investors to defer buying an annuity which can be done until they are 75-years-old. Less money will be available for buying an annuity if investors use the pension fund to provide an income, but good investment performance can help solve this problem. There is a debate as to whether with-profits funds can provide strong enough returns to protect the purchasing power of an annuity, though they provide some protection by locking in bonuses.

Direct Life Insurance Carriers, Life insurance, Annuity Insurance, Personal finance

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A time to buy

Article Abstract:

UK annuity rates are rising and this should benefit holders of personal pensions who are purchasing an annuity. Once the annuity has been purchased the rate cannot be changed so the timing of the purchase is important. Annuity rates are not likely to rise further to any great extent until 1998, so there is no need to defer a purchase unless it can be deferred for more than six months. Rates also vary according to providers, and the difference canbe as much as 20%.

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