Annuities and a question of age

"The first is that investing in annuities is contrary to the interests of a family... in that they are worth nothing when the investor dies. The second reason is simply that annuities are a lousy form of investment."

The main objection to annuities is the fear of dying and leaving a huge amount of money to the insurance company, but this point has sharply divided the government from pensioners.

The government, the Treasury and HMRC have always insisted that a pension should be used for the purpose for which it was intended, that is to provide a pension income.

The thought that investors will use pension funds as a vehicle for passing capital to their family after their death is not always popular with politicians.

The second point, that annuities are a lousy form of investment, is simply untrue.

I will spare you the boring stuff about high yields and mortality cross-subsidy and simply remind readers that the only alternative to annuities is drawdown (taking an income directly from a pension fund) and many investors saw the value of their drawdown plans falling as a result of the credit crunch and volatile equity markets.

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Pensioners House Insurance - News


Calpers After Scandal Embraces Risk for Pensioners Facing $240 Billion Gap Bloomberg
table border=0 cellpadding=2 cellspacing=7 style=vertical-align:top;trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serif/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbr /div style=padding-top:0.8em;img alt= height=1 width=1 //divdiv class=lha href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNG0fILckWLRxAlaiOCq9-hoYNFH3Aamp;url=http://www.bloomberg.com/news/2010-09-09/calpers-after-scandal-embraces-risk-for-pensioners-facing-240-billion-gap.htmlbCalpers After Scandal Embraces Risk for bPensioners/b Facing $240 Billion Gap/b/abr /font size=-1bfont color=#6f6f6fBloomberg/font/b/fontbr /font size=-1He induced trade groups to improve workplace safety by giving them rebates on untapped workers#39; compensation binsurance/b premiums, which lowered costs. b/b/fontbr /font size=-1 class=p/fontbr /font class=p size=-1a class=p href=http://news.google.com/news/more?pz=1amp;ned=usamp;ncl=d9FEdvn4jQSPWbMnobrband morenbsp;raquo;/b/nobr/a/font/div/font/td/tr/table

Too poor to retire: The over-55s with no pension, no savings, just massive debts Daily Mail
table border=0 cellpadding=2 cellspacing=7 style=vertical-align:top;trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNG7AQm_ipbSyCMJG74Itlhy5AbfcAamp;url=http://www.dailymail.co.uk/news/article-1309939/Too-poor-retire-Over-55s-pension-savings-just-debts.htmlimg src=http://nt1.ggpht.com/news/tbn/EbvR5hf4JfDy1M/6.jpg alt= border=1 width=80 height=80 /br /font size=-2Daily Mail/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbr /div style=padding-top:0.8em;img alt= height=1 width=1 //divdiv class=lha href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNG7AQm_ipbSyCMJG74Itlhy5AbfcAamp;url=http://www.dailymail.co.uk/news/article-1309939/Too-poor-retire-Over-55s-pension-savings-just-debts.htmlbToo poor to retire: The over-55s with no bpension/b, no savings, just massive debts/b/abr /font size=-1bfont color=#6f6f6fDaily Mail/font/b/fontbr /font size=-1The major study, from binsurance/b giant Aviva, found one in five people over the age of 55 still had a mortgage. The average size of their bhome/b loan is £60440 b/b/fontbr /font size=-1 class=p/fontbr /font class=p size=-1a class=p href=http://news.google.com/news/more?pz=1amp;ned=usamp;ncl=dAgUiVPlP-DYhqMnobrband morenbsp;raquo;/b/nobr/a/font/div/font/td/tr/table

How house prices and debts are building ugly tensions between parents and ... Telegraph.co.uk (blog)
table border=0 cellpadding=2 cellspacing=7 style=vertical-align:top;trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNENST4OTydxAxJxLN7djAsAnEZoAAamp;url=http://blogs.telegraph.co.uk/finance/ianmcowie/100007530/how-house-prices-and-debts-are-building-ugly-tensions-between-parents-and-their-children/img src=http://nt3.ggpht.com/news/tbn/vxyfTuPfOlb5WM/6.jpg alt= border=1 width=80 height=80 /br /font size=-2Telegraph.co.uk (blog)/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbr /div style=padding-top:0.8em;img alt= height=1 width=1 //divdiv class=lha href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNENST4OTydxAxJxLN7djAsAnEZoAAamp;url=http://blogs.telegraph.co.uk/finance/ianmcowie/100007530/how-house-prices-and-debts-are-building-ugly-tensions-between-parents-and-their-children/bHow bhouse/b prices and debts are building ugly tensions between parents and b/b/b/abr /font size=-1bfont color=#6f6f6fTelegraph.co.uk (blog)/font/b/fontbr /font size=-1All this makes a refreshing change from another report, this time from the binsurance/b giant Aviva, which paints a familiar picture of bpensioner/b poverty. b/b/fontbr /font size=-1 class=p/fontbr /font class=p size=-1a class=p href=http://news.google.com/news/more?pz=1amp;ned=usamp;ncl=d4Fvt4IYORO3P2Mnobrb/b/nobr/a/font/div/font/td/tr/table

THE LAST WORD by TONY HAZELL: Fiasco? Its a write-off Daily Mail
table border=0 cellpadding=2 cellspacing=7 style=vertical-align:top;trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serifa href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNGEssdChDAWW4QsY-Wxjr28OB1vCQamp;url=http://www.dailymail.co.uk/money/article-1310066/THE-LAST-WORD-TONY-HAZELL-Fiasco-Its-write-off.html?ito%3Dfeeds-newsxmlimg src=http://nt1.ggpht.com/news/tbn/3ZzFvUpXbLg-TM/6.jpg alt= border=1 width=80 height=80 /br /font size=-2Daily Mail/font/a/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbr /div style=padding-top:0.8em;img alt= height=1 width=1 //divdiv class=lha href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNGEssdChDAWW4QsY-Wxjr28OB1vCQamp;url=http://www.dailymail.co.uk/money/article-1310066/THE-LAST-WORD-TONY-HAZELL-Fiasco-Its-write-off.html?ito%3Dfeeds-newsxmlbTHE LAST WORD by TONY HAZELL: Fiasco? It#39;s a write-off/b/abr /font size=-1bfont color=#6f6f6fDaily Mail/font/b/fontbr /font size=-1Homeowners are being used as the pawns in a stand-off between the Government, property developers and the binsurance/b industry. Government promises to improve b/b/fontbr /font size=-1 class=p/fontbr /font class=p size=-1a class=p href=http://news.google.com/news/more?pz=1amp;ned=usamp;ncl=dDtLAfNN7W1xGCMnobrband morenbsp;raquo;/b/nobr/a/font/div/font/td/tr/table

The Japan Equity Fund Announces Third Quarter Earnings MarketWatch (press release)
table border=0 cellpadding=2 cellspacing=7 style=vertical-align:top;trtd width=80 align=center valign=topfont style=font-size:85%;font-family:arial,sans-serif/font/tdtd valign=top class=jfont style=font-size:85%;font-family:arial,sans-serifbr /div style=padding-top:0.8em;img alt= height=1 width=1 //divdiv class=lha href=http://news.google.com/news/url?sa=tamp;fd=Ramp;usg=AFQjCNGWFVVECeiiXVw8G_TcppMOe9ReNQamp;url=http://www.marketwatch.com/story/the-japan-equity-fund-announces-third-quarter-earnings-2010-09-08?reflink%3DMW_news_stmpbThe Japan Equity Fund Announces Third Quarter Earnings/b/abr /font size=-1bfont color=#6f6f6fMarketWatch (press release)/font/b/fontbr /font size=-1While mild deflation is quite agreeable to Japan#39;s aged bpensioners/b, government employees and salaried workers comfortably ensconced within large b/b/fontbr /font size=-1 class=p/fontbr /font class=p size=-1a class=p href=http://news.google.com/news/more?pz=1amp;ned=usamp;ncl=dQlD-N4F2AeI8cMnobrband morenbsp;raquo;/b/nobr/a/font/div/font/td/tr/table