Three things we learned this week

Govt confirms simplified flat-rate state pension

Pensions minister Steve Webb has confirmed the details of the coalition's overhaul of the basic state pension.

Speaking in Parliament this afternoon, he confirmed the weekly payment would stand at £144, plus inflation increases between now and 6 April 2017.

The current full state pension is £107.45 per week, but this can rise to £142.70 with top ups from pension credit and the state second pension.

To read more click HERE

Flat-rate pension equates to £130k annuity purchase

Retirees looking to achieve the £144 per week flat-rate state pension level with an annuity purchase today would need a pension pot totalling £130,000, according to analysis from Prudential.

The government's white paper on state pension reform means everyone retiring from April 2017 will get £144 per week, equivalent to an income of £7,488 a year.

Prudential's analysis found a 65-year-old today would need a £130,000 fund to generate the same £144 a week, assuming they secured the highest possible single life annuity without a guarantee.

To read more click HERE

Annuity experts relieved as RPI unchanged

Annuity experts have welcomed the Office of National Statistics' (ONS) surprise decision to keep the current measure of inflation.

The ONS had consulted on changing the calculation of the Retail Prices Index (RPI) to bring it in line with the Consumer Prices index which tends to be lower.

Commentators feared any change would lead to pensioner detriment as many annuities are linked to RPI. Alan Higham, chairman of Annuity Direct said the proposed change would have meant an inflation rate decrease of 0.9%. This would have wiped over 10% off the value of a 65 year old's pension.

To read more click HERE

 

 

 

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Send to  

• Topics
• Investment
• state pension
• annuity market
• RPI
• Prudential
• Steve Webb