by Michael Ormond on November 9, 2009
Figures released by the Organisation of Economic Co-operation and development in October have given rise to a new debate on the UK pension sector and its in-capabilities.
The figures revealed a 4% rise in pension fund net deficits from 9% to 13% in six months.
Furthermore, many large business final salary schemes have been abandoned in the last few months as these have become too expensive for employers suffering the effects of the recession. Currently only one in twenty of the biggest businesses are offering final salary schemes to new employees.
Head of pensions at Hargreaves Lansdown, Tom Mc Phail, blames bad political decisions for the demise of the British pensions sector and the weakened position of today’s pensioners.
He explains that the pensions sector is witnessing a shift away from guaranteed pensions like the state pension and final salary schemes towards a situation where individuals are personally responsible for their retirement savings and the associated risks.
Pensions are difficult enough to navigate at the best of times and in a time when even experts agree that the pensions system is ‘not fit for purpose’ the task of finding an appropriate scheme seems even more daunting.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
Comments (0)
by Michael Ormond on
AVIVA is optimistic about its full-year profits in spite of its poor domestic performance in the first three quarters of this year. The firm’s domestic performance revealed a 25% drop in life and pension sales and was so weak, it dragged global sales down by 11% to a worse than anticipated £24.06 billion.
Aviva’s pension sales in the UK fell to £2.9 in the first three quarters of the year compared to £3.5 billion a year last year and protection insurance product sales decreased by 19%.
The recession has caused the UK’s pension industry enormous problems and protection insurance sales to drop considerably. Soaring unemployment rates have seen a shift in consumer focus with a drop in demand for pensions and savings products.
AVIVA explains the effect of the drop in demand for insurance and pension products on profit is being offset by a focus on quality rather than quantity and the positive developments in the stock market and predicts good total profitability for 2009.
As a result of this optimistic outlook, the life and pensions firm saw its shares rise by over 6% and its capital buffer expand by half a billion pounds to £3.7 billion.
So, in spite of a slow start to the year, it looks like the recession is not all gloom and doom and investors can indeed still profit.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
Comments (0)
by Michael Ormond on November 5, 2009
Everyone knows the UK pension industry is looking pretty sorry for itself, but in a new report by AXA, this is only the tip of the iceberg.
More than 3 in 5 UK citizens are intending to rely upon their state pension fund in retirement, which only spells disaster. It is also a clear indication of how private pensions have failed.
64% of people in the UK will be planning to depend on their state pension, but because of several different taxes and changes in regulations, state pensions are now looking at huge deficits. The raid on pensions helped ‘line the government’s coffers’ but has proved almost fatal for state pensions. Even if taxes were reversed on pensions, this would almost definitely be too little too late.
With more pressure likely to be put on state pensions, the government is going to find it increasingly hard to cope.
Michael Ormond is a Financial Advisor specialising in Pension Release services.
Comments (0)
