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&#39Trivial change to squeeze annuities&#39

Sofa managing director Bob Bullivant says the annuity market will shrink by more than a quarter to £5bn from its current level of £7bn when pension simplification takes effect in April 2006.

He says the sector will be squeezed at the top and bottom, with the raising of the trivial commutation limit cutting out thousands of small funds while alternatively secured income will become an alternative for bigger funds.

People with funds up to £15,000 will not need to buy an annuity. Under current rules, annuity purchase is obligatory unless the fund could buy total income of less than £260 a year.

Annuity providers could be forced to reduce rates as they lose large amounts of business with favourable mortality experience for them, says Bullivant.

He says: “The market is facing removal of the more favourable clients and potential reduction of rates as European sex equality rules are adopted both compounding the unpopularity of annuities with alternatively secured income becoming increasingly favoured.”


CA picks charity director as new chief

The Consumers&#39 Association has announced the appointment of Peter Vicary-Smith as its new chief executive. Vicary-Smith has been commercial director at Cancer Research UK since 2002 and was previously director of fundraising and communications at Imperial Cancer Research Fund. He will join the CA at the end of August. His appointment comes after the death […]

Sector switch boosts zeros

The newly created UK zeros sector should boost interest in funds which invest in the much criticised share class, according to Investec Asset Man- agement. Zeros, which were at the centre of the split-cap scandal, had until recently been lumped in the UK other bond sector, which contains a hotchpotch of virtually incomparable funds. But […]

FSA opening up to IFAs with regional surgeries

The FSA is going on the road in its first series of regional visits to IFAs which it hopes will make it appear more approachable. First port of call is Gloucestershire, where six members of the FSA team will answer queries from IFAs. IFAs will be able to book 45-minute surgeries to discuss issues. The […]

Alliance & Leicester – 10 Year Base Rate Tracker &#45 Standard Package

Type: Tracker mortgage Tracker term: 10 years Tracker rate: 0.99% above Bank of England base rate Payable rate: 5.24% Minimum loan: £25,000 Maximum loan: Up to 95% of valuation subject to a maximum of £250,000, up to 90% of valuation subject to a maximum of £500,000, up to 85% of valuation subject to a maximum […]

Image courtesy of Stuart Miles at

Pension freedom: wish you were here?

Out there lies a warm ocean of desert islands, sun, sand and palm trees, where individuals can choose how and when to tax-efficiently access their pension fund and realise the retirement dreams they have worked so hard for.


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