Increasing longevity means that 90 per cent of people could exhaust their savings before they die if they withdraw more than 4 per cent a year, warns Fidelity.Research by the fund firm suggests that 70 per cent of over-55s who have not yet retired do not know how much they will need to withdraw from their savings in retirement. Fidelity concludes that, for an increasing proportion of their retirement income, people will rely on sources that do not have the lifetime guarantee that comes with an annuity. It says this will cause a significant shift in the market which poses a whole new set of challenges. It says: “Withdrawing more than 4 per cent a year in real terms will considerably heighten the risk of capital erosion and the prospect that our money may run out before we die.” It outlines a checklist of five things which should be considered in retirement planning, including estimating monthly or annual expenditure, looking at other potential sources of income such as equity release and considering life and long-term care insurance. President of institutional business Simon Fraser says: “People could find themselves in retirement for up to 35 years, almost as long as they spend in their working lives. “This has huge implications for savings. People need to be much more informed about the rate at which they dip into their capital, otherwise they are in danger of burning through their savings well before they die. “They then face the prospect of falling back solely on state and company pension benefits, often at a time when their expenses could be rising as a result of ill health.”
Having worked over the years with a number of advisers who were, let us say, keen on bond rebroking, I have always been a bit suspicious of whose interest is really being served. What Glynn Downton fails to point out (Money Marketing, September 28) is that the new bond he has recommended to his clients […]
Misys chairman Sir Dominic Cadbury has moved to reassure investors after a turbulent week that saw chief executive Kevin Lomax resign and over 200m wiped off the value of the stock. Cadbury, who is acting as interim chief executive while a replacement is found, told the firm’s AGM last week that it was business as […]
Last week saw the launch of the Government’s new open market HomeBuy scheme. The fact that little in-depth press comment was seen in the nationals is possibly a reflection of scepticism in the market about the scheme.
There has been a lot of comment recently that the days of smaller company funds’ outperformance are over because valuations are now comparable with those of bigger companies.
By James Hackman, Manager of the Neptune US Income Fund Watch James Hackman, Manager of the Neptune US Income Fund, discuss why he believes companies demonstrating dividend growth – not just with high headline yields – is key in generating outperformance in the US. Click here to watch the video Important information: Investment Risks Neptune […]
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The Financial Services Compensation Scheme has declared self-invested personal pension operators Stadia Trustees, Brooklands Trustees and Montpelier Pension Administration Services in default. The lifeboat fund has received around 150 claims for compensation relating to the three businesses. Those claims relate to how the businesses set up, operated and administered Sipps through which people invested in […]
The Department for Work and Pensions has confirmed it will not change the pensions triple lock and will explore bolstering the powers of The Pensions Regulator in the forthcoming legislative period. The DWP published its “single departmental plan” yesterday, which sets out five objectives it is working towards over the next four years. It has […]
Sam Seaton talks about how her interest in people affects her approach to technology