The great annuities con is over

[fazersharp]

  I have never understood them in the way that it is atotal gamble and the insurance company trouser it if you die once its starts. Mark my words this will be the next big misselling scandal. Billions wiped off the value of insurance companies because investors know what a money making scam they were, and now it will be gone so called experts are saying oh people "blow" it all and then go on to state pension and burden the taxpayer but what they fail to realise is that if I spend a £100k pension pot then I am paying the government £200K  by way of VAT on stuff I buy.

[Fazerider]

Annuities were not a gamble, that was the whole point. In exchange for your savings built up in a pension plan you got a guaranteed income that would last you the rest of your life. It's the life bit that was the gamble… you can't rely on living long enough for that to be better than other investments (or even drawing down the pension pot). Now, at least, you have the choice. Hopefully insurance companies will improve their rates now they're competing with other forms of saving and investment rather than living in a walled garden where annuities were mandatory.


The downside of the policy, of course, is that it'll push up house prices. Wealthy retirees will take a good chunk of their pension pot and invest in property, the rental income should provide a much better return that they'd get from an annuity.

[goldfazer]

You won't 'go on to state pension and burden the taxpayer' - you'll still get that anyway. No-one should be penalised for saving for a pension. I just hope that it doesn't reduce the growth of pensions currently being built up.