Do you have too much pension?

Article Abstract:

The United Kingdom Inland Revenue has pension funding rules which could mean that some high-earners may have more benefits from their pension funds than they are permitted to use when they retire. Limits apply both to contributions and withdrawals from pension schemes. Overfunding can arise if funds perform well, and pension funds have achieved strong growth in the five years to 1999. Overfunding can mean that savers in occupational schemes are unable to move their funds to personal schemes for income drawdown plans. New rules have been introduced that critics arfue confuse the issue and focus on the need to avoid overfunding.

Personal Financial Mgmt, Retirement planning

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Protect your pension from price rises

Article Abstract:

Investors can obtain some protection from inflation when they purchase an annuity. Only some fifth of investors do so, but inflation has averaged 8.27% from 1967 to 1996, and this rate can reduce income to less than half over ten years. Investors can buy an annuity that rises in line with retail prices, but this tends to be expensive. They can also continue to invest part of their income which means paying less for an annuity and being able to leave more to heirs if they die early. This approach carries the risk that investments may not perform well.

Finance, Inflation (Finance), Annuities, Inflation (Economics)

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Coping with the latest pension scandal

Article Abstract:

There has been an investigation into the selling of top-up pensions by the industry regulators, which believe than mis-selling may have occurred. Free-standing additional voluntary contribution contracts (FSAVCs) are more expensive than additional voluntary contributions (AVCs) provided by employers, so on the whole, savers are better advised to choose AVCs where they are available. Some advisers note, however, that FSAVCs offer greater portability, so people who change jobs frequently may be better off using them.

Marketing, Pensions

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