Abstracts » Business

The perils of taking a late pension

Article Abstract:

The timing of retirement affects the annuity that can be purchased, and a scheme has been launched to allow savers to delay their annuity purchase. Pension fund withdrawal schemes are available for holders of personal pensions, and the rules have yet to be clarified. Pension fund withdrawal involves risks, for example investment in equities is a way of achieving high returns, but a drop in share prices can mean a drop in income. Investors with small pension funds are advised to be wary of this new option.

Annuities

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Pension safety post-Maxwell

Article Abstract:

The UK Pensions Act is likely to be fully implemented in 1997, and focuses on protecting the assets of pension scheme members. More democracy has been introduced to help prevent problems. Auditors and actuaries of schemes are also required to tell authorities if irregularities are suspected. The minimum funding requirement (MFR) introduced in this legislation has been the subject of debate since it is not easy to calculate, and provisions have been diluted so more types of investment count as assets.

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Stick or carrot?

Article Abstract:

The United Kingdom government plans a new pension scheme providing value for money, portability and flexibility. The scheme is intended to supplement the basic state scheme and can replace the earnings-related state scheme. The government aims to keep charges low and the Office of Fair Trading has suggested tracker funds be used for this purpose since their costs tend to be low. Compulsory contributions could be introduced since the government has a large enough majority.

Welfare reform

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