View more on these topics

Green Paper fails to recognise public distrust of annuities

Unfortunately, there is nothing in the Pensions Green Paper which is likely to make the slightest difference to the public&#39s ingrained distrust of and lack of confidence in private pensions.

Whether or not Joe Public still believes that the state will look after him if he makes no provision of his own is another matter. If he does, he is a fool.

Given that one of the most ingrained terrors of civilised society is penury in old age, the thought that people are going to reach retirement having done nothing at all for themselves is pretty scary. So what is the Government doing about it?

Aifa&#39s paper in response to the Green Paper says: “The Government wants shopping around for the right annuity to be made easier.” This overlooks the fact that people do not want to buy an annuity at all. For people who do not want to buy one, there is no right annuity.

What people want is a pot of money they can use in any reasonable manner of their choosing to provide an income for life. This means being allowed to spend the capital at a regulated rate and/or leaving what has not been spent to the next generation. Until the Government wakes up to this fact, anything else it does is just tinkering with the machine.

Just how bluntly does the message have to be spelt out? The public do not like annuities and will not commit money to a product which forces them to buy one. Is Andrew Smith stupid or ignorant or both?

Julian Stevens Partner,WDS Independent Financial Advisers,Kingswood, Bristol

Recommended

Newcastle brings out third property bond

Newcastle Building Society has brought out the third issue of its guaranteed property bond. The bond works in a similar way to guaranteed equity bonds that are linked to stockmarket indices, but it is linked to the performance of the Halifax House Price Index for five years. To calculate the final returns, the level of […]

Action stations

On the economic front it looks like being a difficult year, according to most commentators. We certainly seem set for a tough time. Does this mean, for financial advisers and product providers, that it is not worth trying because nobody will have the confidence to transact financial services business? Certainly not.Encouraging your clients to take […]

Client ownership fears over aggregation portal

An industry project for online aggregation standards must guarantee IFAs&#39 ownership of their clients or face rejection, providers are being warned.IFAs welcome simplifying the standards but are meeting providers in Edinburgh next month to ensure that the blueprint for an aggregated portal service for group business does not restrict their ability to control client data.The […]

Bristol & West launches new fixed rate mortgages

Bristol & West is launching three fixed rate mortgages, one is a five year fixed product and the other two run for two years. The five year fix has a rate of 4.49 per cent, a loan to value of 95 per cent and an arrangement fee of £299. One two year fix with a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment