UK - Annuities should include a money back guarantee, Prudential proposes in its response to the government's 'Modernising Annuities' consultation paper.
Prudential says that in return for a slightly lower annuity income individuals should be able to pass on a taxable lump sum on death.
Prudential annuities managing director Tom Boardman believes this change may allay many people’s major worry about buying an annuity: namely, that the pension fund they have saved hard to build is swallowed up by the insurance company if they die soon after its purchase.
Prudential proposes that a typical annuitant might see a 2% reduction in their annuity income in return for a money back guarantee, the cost though would depend on age and the type of annuity chosen. Boardman added: “The proposal is particularly attractive for RPI-linked annuities since the current 10 year guarantee would only result in some 55% of the fund being repaid to a 60 year old male who dies during the first 10 years.”
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The Local Authority Pension Fund Forum (LAPFF) has announced the sudden death of its chairman, Ian Greenwood, on Monday (12 November) night at age 68.
Jonathan Stapleton wonders whether we need a thorough review of the principles for institutional investment decision-making