Posts Tagged ‘pensions’
Bonds: a safe place for returns?
It’s no secret that pensioners who are already drawing an income from their funds are suffering under the credit crisis.
Anything invested in stocks and shares would likely have seen a terrible bounce over the past year since the collapse of Lehman Brothers, followed by the FTSE 100 reaching a high this October.
Despite that positive news, there are still plenty of concerns that the UK could fall into a deeper recession, so things could possibly get worse.
In the meantime, the normal savings vehicles for pensioners are under pressure, with most savings accounts only marginally over the Bank of England’s base rate.
And offshore accounts, of course, still fall under HMRC tax rules, which means the fall in returns from offshore banking mean the tax savings can be pretty slim.
What is really interesting is the observation that savers have become investors, as savers are pushed into fixed term bonds for 2-5 years.
Does this mean that bonds present a safe haven for returns?
Certainly in the short term, but do be careful – if we really are part-way through a double-dip recession, then rampant inflation in the near future could be a very real danger, which could soon make those fixed-rate bond deals look quite low indeed.
Pensions are old
I see here they mention that half of the 39% of the participants in the survey, saying that they did not have a pension in place are under 18 years old.
While I think it might be a good idea to have something small in place, it is not surprising to see under 18’s without a pension. After all, which teenager is going to miss their big night out with friends to put £40 into a pension fund, that after inflation and a few years, will be worth next to nothing!
In a survey of 2,000 adults, Fairinvestment.co.uk has found that 39 per cent do not have a pension plan in place, and 20 per cent of those with a pension have had to reduce their contributions or stop paying into it since the credit crunch began
Nearly half of the 39 per cent surveyed who admitted to not having a pension in place were under the age of 18.
Fear of pension scheme’s
Many businesses are worried that pension schemes could have more of a negative affect on their business, than a positive one.
This comes after statistics revealed that around 90 percent of companies expressed they were worried about the affect pensions schemes would have on their business.
Nine out of 10 companies are worried about the impact their pension scheme will have on their business, research showed.
Around 90% of firms that still offer a defined benefit pension said they were concerned that the scheme’s trustees would ask them to increase their contributions to it at a time when they can least afford it.
Pension buy outs slow down
Aon Consulting are suggesting that throughout 2009, the Pension buy out market is likely to slow considerably; definitely not the only market in difficulty.
2008 was a good year for the pension buy out market, where both the value of deals and the actual number of deals saw a huge increase, something that is likely to swap around for 2009.
The U.K. pension buyout market will slow this year despite record growth in 2008, according to an analysis by Aon Consulting.
The burgeoning bulk annuities market rose in terms of both the value and number of deals in 2008, with 273 deals worth £8.2 billion ($12.1 billion), up from 259 deals worth £2.8 billion in 2007.
Retirement savers need stability
Retirement savers are definitely not being shown enough respect from the banks or the Government.
The pensions industry needs to step up their game to ensure that savers are being offered the best deals.
Retirement savers need stability
Following the Department of Work and Pensions (DWP) research into the benefits of long-term saving, MetLife is urging the government and pensions industry to do more to tackle current levels of uncertainty among retirement savers.
The report from the DWP, Saving for Retirement: Implications of Pensions’ Reforms on Financial Incentives to Save for Retirement, shows that, given reasonable assumptions about the future, most people can expect to be better off in retirement by saving, with the majority getting back more than double the amount they save.
UK pension challenge
The pension scheme alongside the UK banking sector is slowly falling to pieces and it is only a matter of time before pension plans start to evaporate.
Employers in the UK are about to experience the same strictures as their Australian counterparts in dealing with the superannuation guarantee following passage of the legislation underpinning a so-called Personal Accounts scheme.
And according to UK research house Datamonitor, the new scheme will test both employers and the UK Government even before it is introduced in 2012.
Pensions in awkward territory
Not good times for the Government or UK pension holders then, who seem to both be in a state of stale mate, with the banks calling all the shots as usual, even though they are funded on a large scale by the tax payers in the first place.
They may rank alongside other unsecured creditors, such as the banks, but put a company into administration and they often become a different beast with the largest seat at the table.
In the build up to a meltdown, though – as the banks start pulling the strings – they are curiously toothless.
Not too bad for pensions
Its good to see that in some places in the UK economy there is some slightly positive activity going on, although its not entirely positive.
Lets face it though, compared to the rest of the worldwide markets, to pull back the amount they have over 12 months can only be a good thing.
Despite a tumultuous 12 months, Britain’s biggest schemes are sitting on a £3bn surplus, having started the year with a £2bn deficit.
Aon Consulting, which has calculated the pension scheme funding, said the swing back into the black will be significant as half of UK companies complete their accounts at December 31.
Provident Friends expands
It’s nice to see a few companies can still develop their businesses, especially in the current climate, and with pensions decreasing in value every day, it might be worth while taking their business abroad, especially if they can offer them something extra special!
http://www.moneynews.co.uk/5801/friends-provident-expands-in-asia/
RBS had offered out almost 30 billion shares in a bid to sure up their balance sheets, but investors bought up just 56 million of the above market-value stock – a 0.2 per cent share – leaving the government to buy out the remaining 22.9 billion shares.
UK-listed pensions company Friends Provident has expanded the scope of its business into the Asian market.
NAPF warns on ASB proposals
The National Association of Pension Funds (NAPF) has warned that proposals put forward by the Accounting Standards Board (ASB) could see more final salary pension schemes close as a result.
According to Reuters: UK pensions body warns on accounting proposals
The overhaul put forward by the ASB would force pension schemes to calculate their liabilities much more conservatively than at present, which would add billions of pounds to pension liabilities, the pensions industry has warned.
Analysis conducted on behalf of the NAPF showed the ASB proposals could double the reported liabilities of some final-salary schemes, which offer members a guaranteed income in retirement.
At a time when many final salary pension schemes are being closed, it’s perhaps the government paid more attention to how to support the pensions industry, rather than further damage it.