Devonshire magazine November December 2018

MANAGING your MONEY
"the hardest thing in the world
to understand is income tax"
Albert Einstein
Celebrating 26 years of
providing independent
financial advice in Devon
Stalling longevity
and its impact on the pension world
Helen Mulvaney
BA (Hons), Dip M, DipPFS
Proprietor of
RICHMOND INDEPENDENT
We seem to have got very used to the ever growing life
expectancy rates which have been used, particularly by
government, over the last decade or so, to convince us that we need
to pick up our state retirement pensions a lot later.
However, over recent years, the
increase in life expectancy seems
to have stalled*. The reasons for
this are difficult to pin-point as
there seem to be multiple factors
causing this slowdown. Not least,
that deaths from dementia and
Alzheimer** related complications
are on the rise and these have
off-set the gains from other
serious illnesses, such as cancer
and heart problems. Diabetes is
also possibly going to make an
increasing impact with diagnosis
of this disease trebling for men
and women over the last 20 years
and storing up problems for the
future. This is also a disease which
will have a devastating impact on
the NHS as its management can
be very expensive. The UK is not
alone in experiencing slowing life
expectancy with many developed
countries in the same position.
Slowing life expectancy has had a
number of implications especially
for annuity providers and trustees
and corporate sponsors of final
salary schemes. Many have had
to revisit their projections. For
final salary schemes this has
represented a bit of relief and
possible reduction in anticipated
costs, whilst big insurance
companies with large annuity
books are probably going to be
Slowing life
expectancy has
had a number of
implications
more profitable and able to release
some reserves. Although the effect
of slowing mortality rates may take
some time to filter through. For
those looking at buying an annuity,
the situation has improved as their
retirement savings may go a little
further. This is likely to continue
over the next few years , unless
there's a substantial pick up in life
expectancy.
The recent improvements in
annuity rates have been due mainly
to improving gilt yields, but they
are probably still historically low.
However, as factors such as life
expectancy and interest rates
develop it is possible that buying
an annuity will become more
attractive in the future. Those in
good health have probably not
benefited too much from recent
annuity increases because more
retirees are taking advantage
of medical underwriting and
therefore those who are fit and
healthy will get worse rates. If
you want a guaranteed income
for your lifetime then here's a
reminder that shopping round the
market for an annuity will nearly
always be beneficial (unless there
is a high guaranteed annuity rate
attaching to your pension policy).
Therefore it's worthwhile getting
some independent advice on this
matter. For clients in drawdown, we
regularly consider how annuities
compare and how much income
Helen has been advising
clients in the East Devon
for the past 26 years and
specialises in the provision
of retirement and
investment advice.
richmondindependent.co.uk
helen@richmond-ifa.com
01395 512166
might be produced from an annuity
at our regular reviews. This helps
clients to focus on merits of taking
a guaranteed income as opposed to
taking income from a drawdown
pension. Stockmarkets have been
volatile recently and may become
increasingly volatile as we head
towards Brexit and it's important
that retirees should also remain
aware of the investment risk and
sequencing risks that are part of
drawdown plans.
Helen Mulvaney
* Source Office of National Statistics
** reasons for stalling longevity FT
Adviser 04/10/2018
Richmond Independent is a trading name of
Investment & Financial Solutions Partnership
LLP which is authorised and regulated by the
Financial Conduct Authority
The Old Vet’nary
continued from page 93
domesticity to the feline full.
Although she will go out and enjoy
her territory, she makes it clear that
unless the weather is perfect, she
would rather stay in with us. She
is the most intelligent of the three
and has developed many quirks of
habit. She will only drink from a tap
and lets us know when she is thirsty.
At night she sleeps in the kitchen
for she would otherwise give us no
overnight peace. I have to announce
“It’s time for Bed” and she appears
for her nightly head scratch before
making her way to the kitchen. She
loves routine and her favourite foods
are mayonnaise and mashed potato.
She is full of life, but I would be less
than honest if I said she was an angel.
Some time in those early few weeks
of life when she was like a sponge
soaking up habits, good and bad,
someone taught her a game which
involved attacking hands or ankles.
Nothing we have tried has cured her.
As she can also open doors, it can
get tedious.
Yet of all her habits, one is the most
charming. It is my old fashioned way,
after a meal, to get up and give my
wife a kiss. Wherever she may be
in the house this cat miraculously
appears on the table and as I bend
down I feel a wet kiss on my cheek
as she joins in the general love-in.
Her name is Tigger. - Ken
98
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