Well, Christmas might be over for another year, but the retirement plans you are considering are just starting. And it’s best to plan ahead. So, if you are going to retire in 2009 start looking at information now. Get to know what choices you have available to you.

With the ongoing stockmarket turmoil and falling interest rates (leading to reducung annuity rates) is a pension annuity the right contract for you, or might income drawdown be better where you don’t have to commit to spending your reduced pension fund?

The thing is, if you are looking at this annuity website it means you are considering what’s best for your retirement income. Whenever you are to retire next year get a specialist adviser on side now. It could prove to be a very wise move.

Ther are a miriad of options available which could prove better for you than a pension annuity, even with the best annuity rates, and things are changing quickly to reflect the shift in requirements of today’s retirees. A lot of detail can be found on this annuity website, but you will be much better off talking through your full circumstances with an adviser. You could even offer them a mince pie if you’ve any left.

We have a very complicated British pension system. Just look at some horrifying statistics:

Only pensioners in Latvia, Spain and Cyprus are statistically more likely to fall into poverty than those pensioners in the UK;

2.5 million older people in the UK now live on less than 60% of the average national income;

Up to 9 million people working today have no other pension provision than the means-tested state pension of around £124 a week;

The average pension fund a UK employee builds up in the most common kind of private-sector personal pension scheme is only £25,000, which will give a single man of 65 an annual annuity income of just £1,960;

Even if you save up a whole lot more in your pension fund, £100,000, that will currently buy you, at 65, an annual annuity income of only £4,500;

Over the last 30-odd years, because wages are always slightly ahead of inflation, the actual value of Britain’s basic state pension has plunged by maybe around 50%;

In the year to from October 2007, we paid a total of £6.7bn into our pension funds, but they are worth £157bn less because of the stockmarket crash than they were before;

Once we’ve finally extracted our pension pot, we are obliged to use it to buy a pension annuity (a monthly income for life). We do that, naturally, from an insurer, which costs us a fee and, with interest rates falling (leading to lower annuity rates) and life expectancies rising, ensures we can expect less and less for our money;

5 million people lost around £13bn in the private pensions mis-selling scandal;

The basic state pension in the UK is only 31% of average working pay (the lowest in Europe).

There’s probably more, but, hey, it’s Christmas.

Today is Boxing Day, and we know what happens today. You finish off some of the leftovers from yesterday as a cold colation, even if you don’t want it. You take a breath of fresh air, and you probably see more relatives.

But what else happens? Race meetings, all over the country. And what happens there? Betting.

The question is, do you feel that betting on the horses is a better bet than buying a pension annuity, especially with falling annuity rates and the volatile stockmarket. Well, you might get good odds and be lucky, but it’s a one off. An annuity is for the longer term.

Start today looking for advice if you are to retire early in the new year. Better planning now could lead to a better outcome and a better retirement income. But don’t think the horses are a better bet.

Royal London are suggesting that life offices who offer third way annuities may run into serious problems meeting the guarantees under the contract, stunting growth in the flexible annuity market.

Their head of corporate communications, Alastair Buchanan, has stated that many providers looking to enter this market would most definitely not want to launch at the current time, as they would be taking on a lot more of a risk than expected, with the added warning that the variable annuity market has the potential for large capital losses for providers. Further, he said that many of the providers in the US, such as AIG, had run into trouble because they had leveraged income to meet their guarantees by investing in corporate bonds, which have suffered such a drop in value that life insurers had to be given a lifeline and were bailed out by the US Treasury. 

Met Life, which has a bond bracketed in the third way annuities market, reckon they have a more  sophisticated hedging system in place to meet the guarantees, buying futures and options contracts from over 20 counterparties. They do not consider this to be an issue.

The recent capital injection to Aegon is completely unrelated to their third way annuities, stated Lesley McPherson at Aegon UK.

A very Merry Christmas to you and all your family from all of us at rightannuity.co.uk. We have seen a year of turmoil on the world’s stockmarkets and we have seen falling interest rates leading through to falling pension annuity rates. Forget that for now…enjoy the festivities today and the time with your family.

Then, once you’ve washed up and seen the latest Morecambe and Wise re-run, you can start discussing your retirement plans for next year. Should you buy that pension annuity, or should you opt for more flexibility with income drawdown.

Treat yourself in the new year…take advice. Make sure you end up with the best retirement income possible.

Merry Christmas!!