Millions will see pensions slashed by up to 20% as new EU rules are set to send annuities plummeting22/6/2012
MORE bad news on pension's!! TIME TO ACT!
Millions of people could see the value of their pensions slashed by up to 20 per cent because of new EU rules. Those with a £100,000 pension fund could be more than £1,100 per year worse off in retirement because of the reforms, research has shown. The Solvency II rules, which are due to come into effect in January 2014, will force pension funds to hold a higher proportion of 'safe' Government bonds. As the bonds - called gilts - have such low rates of return it will drive down the returns on retirement fund annuities, which are used to pension income. The reforms are designed to make pension funds safer and reduce the risk of them going bust. Annuities, which set retirement income for life, have already fallen to historic lows because of the impact of quantitative easing. At present, a pension annuity fund may invest 20 per cent in low-yield gilts and the rest in riskier corporate bonds which have a higher rate of return. But under the new EU rules, annuity funds will be forced to hold a higher percentage of gilts. New research by Deloitte suggests annuity rates will plunge by between five and 20 per cent when the directive comes into force in January 2014. A £100,000 pension pot currently gives an income of £5,837, but once the regulations come into effect they will be between £292 and £1,167 a year worse off. Take control of your pension by investing in Alternative Investments via a SIPP. LINK TO SIPP INFORMATION PAGE AND VIDEO - SIPP's LINK Read more: ARTICLE LINK A new concept in affordable housing
– £44,950 purchase price – 30.84% below market value -- £20,000 instant equity -- 8% net yields -- SPECIAL OFFER - BUY 5 for the Price of 4.5 - Saving £22,475 Beacon Apartments encompasses an exciting new living concept of one-bedroom UrbanPads for key workers and young professionals and are ideal for first time buyers and investors alike. Located near the centre of Gateshead in the North East of England, Beacon Apartments will be the ideal location for young professionals and those working in the nearby towns and cities such as Newcastle and Durham. The property is situated in close proximity to main motorways and transport links and provides quick and easy access to business centres. Beacon Apartments sits near to the A167 Gateshead Highway, which provides surrounding areas and also the A1 via A184 and the A19 for those commuting to places of work. A converted 1970s building with fully renovated interiors and exteriors, Beacon Apartments is a modern property and provides an attractive option for people looking for central living spaces. The new concept development will be converted into 112 Urban Pads. They are 30m2, one bedroom suited for urban living preferred by young professionals. Each pad will consist of a living and kitchen area, a bedroom and a bathroom. Highlights of Beacon Apartments - Close to areas of interest such as Newcastle and Durham. - Urban Pads concept providing 112 urban pads with rents from £395 pcm. - High Net Yields. Email for further information - EMAIL Student accommodation will continue to offer attractive investment returns in spite of upcoming changes to tuition fees, this is according to all the major market analysts.
Private investors have been attracted to student property as an asset class due to the relatively high yields on offer, driven by the imbalance between the supply of accommodation and the high demand for university places. With an offer on at the moment of buy five get one free there has never been a better time to buy into this market especially when you consider that the current value for student accommodation is £45,000 per unit whilst the deal offered nets the properties down to £25000 per unit. Link to further information – Student pods. Savers approaching retirement are being advised to put off buying a lifetime annuity – or even to consider deferring retirement – as the euro crisis further reduces the income offered to UK pensioners.
Pension experts issued the advice after the FTSE 100 index suffered its largest one-day fall since November, as investors fled equities on fears of a Greek exit from the single currency – and bought into “haven” assets, such as government bonds. This shift is significant for those planning their retirement as both the annuity income they can buy with their pension funds, and the income they can draw directly from their funds are determined by the yields on government bonds, or gilts. Heavy buying has pushed gilt prices up, reducing yields to record lows. “It’s such an awful and difficult situation for anyone approaching retirement,” said Dr Ros Altmann, director-general of the Saga Group, the financial services group for over-50s. “If you can delay, it is worth considering because at some point there should be a correction in rates.” Joanne Segars, chief executive of the National Association of Pension Funds, said: “People who are nearing their retirement need to think carefully about whether this is the right time to lock into the current low rates of interest.” Advisers suggested taking pension cash in stages. “It’s possible to phase into retirement by taking tax-free cash only,” said Mike Morrison, head of pensions development with Axa Wealth. “In the short term, it may be possible to take income from elsewhere.” Now is the time to take control of your pension by investing in Alternative Investments via a SIPP - Link to information video on SIPP's and alternative investments. New schemes allowing pension investors to invest in holiday properties via share ownership in companies that own the holiday lets have been described as “toxic”with some self-invested personal pension (Sipp) administrators refusing to allow these assets to be held.
Currently, investors are not permitted to hold direct investments in holiday lets or cottages within a Sipp, as these bricks-and-mortar assets are considered residential, rather than commercial property – and only commercial property is an authorised pension investment. Holding these shares in Sipps enables investors to benefit from dividends and tax-free growth but many Sipp administrators remain nervous about these schemes – largely due to concerns that the underlying assets could be regarded by HM Revenue & Customs as residential property, and as such expose a Sipp to a large tax charge. The current regulations state that no single shareholder in the company owning the holiday lets is allowed to hold 10 per cent or more of the share capital, or the voting rights, of the company this proves very difficult for the Sipp administrators to monitor and as such in many cases the administrators refuse to accept the shares into the Sipp but the ones that do are potentially putting the Sipp at risk if they don’t closely monitor the investment. Another area the Sipp trustees have to consider is ensuring that the member remains detached from the asset, they should not gain any rights to stay at, or use, the holiday complex through having made that investment but a Sipp member is still able to book and stay at the resort on a normal commercial booking basis. So the warning is if you flout the spirit of the rules then don’t be surprised if the Revenue at some point disallow your investment and you are faced with a large tax bill. All Investment Property Worldwide alternative investments are fully Sippable and comply with all the current regulations regarding Sipp investment – LINK TO THE INVESTMENT PAGE. Wedgwood Museum collection to be sold to pay for company pensions.
At the dawn of the industrial revolution in Britain one of the first global brands created was that of Wedgwood china. Founded in 1759 by potter Josiah Wedgwood, it set standards that others were unable to match. A set of Wedgwood china became the mark of distinction for any aristocratic home and, more importantly, any home of the rapidly emerging middle classes. At the dawn of de-regulated capitalism, in the 1980's, Wedgwood was acquired by the Waterford crystal company. Not for the first time or the last in this era, the management cultures of the two companies were fatally mismatched, the company went bust in 2008. At the dawn of the post-crash phase of bail-out capitalism Wedgwood was acquired by a New York private equity firm, KPS Capital Partners. Most of its remaining 1,500 workers were laid off and manufacturing moved to China. Now, there are reports that to plug a hole in the Waterford Wedgwood pension fund, the Wedgwood Museum, which houses a collection of the company's best work, is to be closed and the china and other artifacts to be sold. This follows a legal ruling by Britain's High Court that the objects are assets of the company. £129 million pounds is the shortfall ($203.5 million). The collection is thought to be worth around £18million, according to The Daily Telegraph, considerably less than what the average Russian oligarch spends on a mediocre painting at Sotheby's or Christie's auctions these days. Martin Levy, a London art dealer told The Guardian, "A small gain for the pensioners will be a long-term loss for the country – no more than a pyrrhic victory." Take control of your pension now! - LINK Take note of what Phil Clark, Head of property investment at Kames Capital, has to say.
‘My view is that 2012 will be every bit as challenging as 2011. However, there are still many good opportunities for property investors to make well-informed decisions. In particular, I believe investors should consider a greater exposure to alternative sectors such as student accommodation or healthcare property. One of the key attractions of these alternative sectors is they generally have a high income yield, an ability to track inflation and have low vacancy rates.’ LINK to Student Accomodation LINK to Healthcare property LINK to Alternative Investments The aggregate shortfall of UK corporate pension schemes soared in
September and is now at its second-highest level, new industry data show, as falling markets and bond yields sharply reduced returns. The UK’s Pension Protection Fund – the safety net for underfunded pension schemes at insolvent employers – said the aggregate deficit of all schemes soared to£196.4bn at the end of last month, from £117.5bn at the end of August. It is not far off the record £208.6bn shortfall in March 2009, at the depth of the recession. The full article can be seen at - http://www.ft.com/cms/s/0/52c38e04-f426-11e0-bdea-00144feab49a.html#ixzz1aZau6uxW Time to take control of your PENSION transfer into a SIPP. - LINK |
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