UK Households need to find an extra £32 billion

Due to the latest annual CPI inflation rate rising to 3.5%, MGM Advantage, estimates that collectively UK households will need to find an extra £32 billion to maintain the same standard of living enjoyed 12 months ago.  For households where the main occupant is aged 65 -74, the corresponding figure is £2.72billion and where they are aged 75 and over, it is £1.76 billion. To maintain the same living standards as a year ago, the UK would need to spend an estimated additional £509 per person.

For the full article read more here

Retired nation sits on £96.41 billion of personal debt

New research from retirement income specialist MGM Advantage reveals that the average retired person has £8,180 of personal debt, collectively equating to a staggering £96.41billion.  The average level of personal debt for a retired man is £9,007, compared to £7,350 for a retired woman.  Around 178,000 retired people each owe £100,000 or more, and just over 729,000 owe between £25,000 and £100,000.  Only 57% of the retired population has no personal debt.

For the full article read more here

120% maximum income is here to stay

Last year the maximum income for the now renamed capped drawdown fell from 120% to 100%. 


But it would be a mistake to think this reduction applied right across the board for retirement income products. Instead, the maximum income for flexible annuities remains at 120%. The reduction to 100% was made amidst growing concerns that income drawdown clients who were taking the maximum income could run out of funds and end up relying upon the State for additional income. But there was no need to make a similar change for flexible annuities. 


Clients don’t run the same risks of fund depletion because the two product types are fundamentally different.

For the full article read more here

Cost of Delay

As annuity rates are falling, delaying decisions about retirement can mean missing out on potential income. It can take years to recoup the income lost over the intervening period if your fund value remains flat.  For example, a 65 year old man can buy a yearly income of £2,856 with a pension fund of £50,000, but a 67 year old man in the same situation could obtain a better annual income of £3,036. If the younger man delays buying an annuity for two years in an attempt to gain a higher income, with all the factors remaining unchanged, he will have given up a total of £5,712 (£2,856 for each years delay) in order to boost his annual income by £180 (The difference between the 65 and 67 year old). At that rate it will take him 32 years to recoup the income by deferring his income for two years. 
For the full article read more here