Pension Advice & Retirement Planning

George Osborne started a pensions revolution in late 2014, opening up a wealth of new options and having a profound impact on the way people use their pension savings in retirement. Rules and tax treatment changes to personal pension accounts in retirement came into effect in April 2015, making them considerably more attractive.

These changes simultaneously rang the death knell for annuities. Over the past twenty years, annuity costs have soared as risk-free investment returns have fallen and life expectancy has risen. Annuities are an inflexible and irreversible retirement product that lock in current interest rates and lock out further investment opportunity or access to capital.

Not only are they expensive but they look increasingly outdated for modern retirement, which can extend over 25 years with periods of very different income and capital requirements. Even when rates were more attractive, annuities were never popular primarily because of the implicit gamble they represent. Those who die young do badly and end up subsidising those who live longer. Annuities are ultimately worthless to the next generation.

It is not surprising that within months of the legislative changes being announced, annuity sales collapsed. Swathes of people are using the new rules and using pension drawdowns to access their pension savings in retirement.

According to the Association of British Insurers, in the first 6 months a total of £4.7 billion in pension assets had been withdrawn and annuity purchases have fallen by approximately 62%. The Association estimates that this trend will continue as people begin to more fully understand the options available to them.

Financial Guides

July/August 2017 Magazine

July/August 2017 Magazine

Currency Fluctuations - Why foreign exchange markets are in unchartered territory

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Factsheets

A Guide to Long Term Care

A Guide to Long Term Care

Supporting self-care activities and independent living in later life

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News + Media

Die poor or Plan ahead ?

Sunday July 16, 2017

Most people are quite surprised to discover just how much they are worth. How often have you heard someone say, “I’m worth more dead than alive”? Britons will pay almost £2 billion more in inheritance tax over the next five years than previously thought, official estimates have revealed. It will rise from an estimated £4.7 …

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Further reduction in Lifetime Allowance or Annual Allowance on the cards?

Monday July 10, 2017

      I wrote in March 2016 the then chancellor George Osborne may consider further reduction in the lifetime allowance (LTA) however he decided to leave this at the current level of £1m, for the time being, growing numbers of worker’s risk tax shocks because they are unknowingly on course to exceed this limit. …

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Can you read the future?

Saturday July 01, 2017

Investing is about the long game however are people getting nervous as stock markets in the US and UK bump around their all-time highs. Newspaper reports are beginning to speculate that a correction may be around the corner. The biggest danger isn’t the correction or a bear market, its being out of the market on …

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Tapering of annual allowance for high incomes – adjusted and threshold incomes

Wednesday May 31, 2017

This measure restricts pension tax relief by introducing a tapered reduction in the amount of the annual allowance for individuals with an adjusted income of over £150,000 and a threshold income over £110,000. Key facts The annual allowance will be reduced for individuals who have ‘adjusted income’ over £150,000 a year. The reduction in the …

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Registered in Scotland SC362302 Advanced Asset Consultants Ltd. is authorised and regulated by the Financial Conduct Authority FCA Registration No: 506551 The Financial Conduct Authority does not regulate National Savings or some forms of mortgage, tax planning, taxation and trust advice, offshore investments or school fees planning.

The information contained within this site is subject to the UK regulatory regime and is therefore targeted primarily at consumers based in the UK. This website is designed to provide you with general information only and does not attempt to give you advice on any particular investment or to recommend any particular investment to you. If you have any doubt as to whether a particular investment is suitable for you, you should contact Advanced Asset Consultants Limited on 0141 331 2434.

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