Public puts pension planning on hold

Article Abstract:

Norwich Union research published in May 1998 showed that about 60% of UK independent financial advisers (IFAs) felt the emergence of a new pension system would result in pension awareness increasing. The survey showed that nearly 25% of IFAs believed that pension plans are being deferred until after the emergence of stakeholder pensions. The UK-based insurance group believes that stakeholder pensions will not be introduced for two years at least, while those who are deferring decisions could be jeopardising retirement funding. Norwich Union believes that IFAs could stress the disadvantages of such delay and the significance of retirement funding to clients.

Comment:

UK: Research shows that 60% of IFAs felt emergence of new pension sys would result in increasing pension awareness

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Pension returns hit five-year high

Article Abstract:

Although pension funds delivered returns of almost 25% to scheme members in the year ending March 1998, analysts question whether such high returns can be sustained. The figures were revealed in a report by the WM Group, a UK-based performance measurement consultancy. Although the return for the first quarter of 1998 was 11%, the highest for over five years, the return for the second quarter is only likely to be around 2%, The majority of the 1600 funds covered by the report were keeping about 55% of their assets in UK equities, though there is a trend towards increasing the proportion of overseas equity holdings.

Comment:

UK: Pension funds deliver returns of almost 25% in year ending 3/98 but analysts question whether such returns can be sustained

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Prudential promotes riskier annuity policies

Article Abstract:

The recent decline in gilt yields on annuity pensions has led to Prudential, the leading pension provider in the UK, suggesting that customers close to retirement age should change to with-profits annuities, despite the higher risk. However, with-profits annuities currently offer a higher starting pension, with a difference of up to 3.6%. Rival company Equitable Life is supporting Prudential's decision, and says that around 30% of its annuities sold in 1997 were with profits.

Comment:

Suggest that clients close to retirement age should change to with-profits annuities, despite the higher risk

Prudential

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