Retirement income options and the Open Annuity
02/12/2013 | Download PDF
Press Comment: FT Adviser, December 2013 - ‘Retirement Income Options and the Open Annuity’
Adam Wrench, Head of Business and Product Development, London & Colonial:
“Annuities remain one of the most popular pension products as retirees seek to turn their hard-earned cash into an income that will last the rest of their lives. However, with pensioners longer life expectancy, ever increasing costs of living and an economy in strife, there is a greater need for more flexibility when choosing the right pension product and advisers must consider alternatives to “conventional” annuities.
To use a cliché, a pension isn’t just for Christmas, it’s for life.
The London & Colonial Open Annuity has proved a breath of fresh air for the annuities market, offering pensioners unrivalled levels of flexibility. Those who opt for an Open Annuity benefit from a wide investment range, including regulated stock market investments such as shares and gilts. Additionally, an Open Annuity allows investors to potentially take a higher amount of income – up to 120% of an average of 3 annuity rates based on a single life, no guarantees (which can also be enhanced rates).
But perhaps the biggest plus for investors is the fact it is reviewable. Regular product and income reviews are provided to ensure that the best available rate is always received and these assessments mean clients can benefit fully from age or health related rate increases.
While conventional annuities offer security of income we would urge pensioners to seriously reconsider any “lock in” deals which might offer the best rate for their circumstances today but fail to take into account changes further down the line. Many people who lock in at 65 will be unable to benefit from an enhanced rate in their later years should their health deteriorate over time, which may also impact upon benefits their spouse may be entitled to, and that is why having a reviewable clause in place is so important. Obviously the Open Annuity, as with any other contract may not suit everyone. Retirees should review all of their retirement options, rather than simply sourcing from comparison sites that may only list "lifetime lock-in” annuities, and it is important that professional financial advice be always sought”.
For more information, please contact:
Matt Godwin London & Colonial 020 3479 5505
Fiona Bond Holt PR 020 8334 8354
Notes to Editors
About London & Colonial
London & Colonial specialises in self-invested products for both UK residents and persons resident overseas.
The London & Colonial Group includes
(1) London & Colonial Holdings Limited – UK parent company
(2) London & Colonial Services Limited which is regulated by the UK Financial Services Authority and operates SIPPs and SSASs
(3) London & Colonial Assurance PLC which is regulated by the Gibraltar Financial Services Commission (matching UK standards) and which offers Open Annuities, QROP Annuities and Open Offshore Bonds
(4) L&C (Administration Services 2) Limited and London & Colonial (Trustee Services) Limited which are both based in Gibraltar and offer the EU SIPP.