View more on these topics

Poor hit as Asp changes will push fat cats into annuities

by Helen Pow

The Government’s strict changes to Asps announced in the pre-Budget report may worsen annuity rates for poor people by pushing the wealthy back into the annuity pool.

Hargreaves Lansdown head of pensions research Tom McPhail says: “By making Asps less attractive, the Government will push rich people back into the annuity system which will have a negative impact on the annuity rates offered to poor people.

“The Government is making it worse for the low-earners they are so keen to help because they are preoccupied with closing off any possible avenue of helping the wealthy.”

William Burrows Annuities director Billy Burrows says the demand for annuities will increase now that Asps are less attractive but he believes that the Government’s decision will force companies to come up with inventive annuity products to cater for clients with different bank balances.

He says: “The fat cats are going to have to buy annuities but I think they will soon be priced to suit their situation. Companies will be looking at introducing different types of annuities.”

Burrows says the Government deserves to be criticised for mucking around people who have made responsible pension decisions.


More fruitful comparisons

It is the time of year when investment managers start to finalise their forecasts for the next year and there is an almost universal view that 2007 will see a perfect soft landing for the economy, with a minimum of disruption.

Book of quotations

The increasing range of protection products brings significant benefits to advisers and consumers in terms of choice but it can mean advisers need reams of illustrations to take into account all the options.

Broker Talkback

Is it unfair for advisers that the 15-year long-stop rule for complaints does not apply to Financial Ombudsman Service decisions?Yes “It is unfair. With legal advice on wills, for example, it can also take longer than 15 years to find out whether the advice was wrong.”Ronald Abram, Abram Lawless Financial Services Yes “My initial thoughts […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm