Archive for the ‘Pensions’ Category

Self-Employed pension shortfall

The average employee gets £91,512 in employer contributions to their pension scheme during their working life, according to research by Prudential cited by the Daily Mail.

Self-employed people don’t get such contributions (though overall they do pay less National Insurance) and need to make up for the lack of them by saving more.

Though many self-employed (and employed) people say they can’t afford to save, most people find that once they’ve been saving for a few months, they no longer miss the cash they are saving. The gain is worth the pain!

If you are self-employed and would like to look at ways in which to save tax and save call us on 0116 380 0133.

Steve Clark

Delaying your annuity can be costly

Piles of Coins Flickr Images_of_MoneyDelaying buying your annuity with a pension pot could prove costly, warns the Daily Telegraph.

It’s true that annuity rates rise with age, so a 67-year-old in good health gets about 5% more income from an annuity than a 65-year-old. But if at age 65 you defer buying an annuity for two years, you would have to live to the age of 106 before the higher income you get at age 67 would make up for the two years’ worth of income you never had.

Converting your ‘pension pot’ into lifetime income is one of the trickiest decisions people face. It’s vital to get advice – there are many more options than you may think.

At 44 Financial Ltd we specialise in helping those that are at retirement choose the right product and maximise the income they receive. We can ensure that you get the best rate by shopping around on your behalf.

If you need any help please call us on 0116 380 0133.

Steve Clark

Image courtesy of Flickr – Images of Money

Women lose out in new pension reforms

Experts have warned that many married women could lose out under the proposed reforms to the state pension being planned for 2016, says the Financial Times.

At present, married women can qualify for state pension based only on their husbands’ National Insurance contributions – but that will change from 2016. After that, only women who have paid the ‘married women’s stamp’ will qualify for state pension.

If you reach retirement age before 2016, the changes won’t affect you. Married women who will reach pension age later and haven’t paid National Insurance should get advice on their situation.

Steve Clark

McDonalds serves up a very low pension opt out rate

McDonalds LogoMcDonald’s says only 2.4% of its hourly-paid and 2.7% of its salaried employees that were auto-enrolled on 1 January 2013 opted out of pensions.

McDonalds has 91,000 employees in the UK. Of those 35,000 are hourly paid.

"There were already 2,000 of it’s salaried employees that were members of their stakeholder defined contribution (DC) pension scheme.

An additional 1,100 salaried staff were auto-enrolled into this scheme.

A total of 9,500 hourly-paid employees were auto-enrolled into the National Employment Savings Trust (Nest) in January.


The demographics of the McDonalds workforce would lead you to suspect that opt-outs would be high. The low rates they have achieved will be welcome news for the government but bad news for employers looking to estimate how many of his own employees will opt-out.

Steve Clark

Photo Courtesy of Flickr – Leonid Mamchenkov

Silver inflation is on the up

Rising costs of fuel and food have greater impact on the elderly and the young.

So the imminent rise in inflation – partly the result of the decline in the value of the pound – means pensioners will see their cost of living rise faster than others.

Alliance Trust calculates that the ‘silver’ inflation rate for people over 75 is now 3.2% against the 2.8% rate for under-30s, who benefit more from falling prices for gadgets and clothes.

Age UK do a similar index and the level of inflation is above that recorded by the Retail Price Index or Consumer Price Index. That’s a really important point for those in receipt of an index linked pension to note.

You actual rate of inflation is likely to be higher than any index that your pension is pegged to.

Steve Clark