Urgent need for UK consumers to review pensions and investments

Changes on their way mean that it's high time to review your insurance - and pensions.

Gender-neutrality law to increase costs for both men and women

By 21st December this year, the UK insurance industry will have to comply with the EU Gender Directive, which insists that men and women must be treated the same when setting rates. Up to now, by and large:

• women tend to pay less for car insurance (typically, safer driver behaviour than men's) and life insurance (on average, women live longer than men)
• men tend to get better annuity rates when taking benefits from their pensions, and pay less for income insurance

You might think that the fair thing to do, where gender-related pricing is concerned, is "meet in the middle", but that means the insurance company takes the risk that it may attract more business from the gender that will ultimately cost them more in payouts. So it could well be that the policy adopted will be to "level-up" premiums.

Time to get a product with guaranteed (i.e. fixed) premiums?

Taxation of life companies likely to increase premiums

But there's another change that will affect premiums, and it's to do with tax. Until now, life companies have been able to offset some of their insurance costs against gains on their investment business; this will stop from 1st January next year, so insurance premiums will no longer be subsidised by investment profits in this way. Actuaries have told HM Treasury (PDF) that this could raise premiums on some term insurances by around 10%.

Time to get a product with guaranteed (i.e. fixed) premiums?

Spouse cover and contracted-out pensions: better options now available

From April 6, 2012 the law on pensions has changed. Up to now, if you were married and some of your personal pension was built up using money from contracting-out of State top-up pensions (SERPS/S2P), that part of your pension fund had to provide a continuing income for your spouse if you died before him/her. This restriction has now been removed.

This means:

• you can have a bigger pension income for yourself, if you opt not to include spouse protection (it may be that your spouse already has good pension benefits of his/her own), but alternatively...
• if you prefer, you can IMPROVE spouse protection - before April 6, the spouse pension based on contracted-out monies HAD to drop to 50% of the income you were getting; now, it can be anything from 0% - 100% of yours.

For men who want a single-life annuity, this may also be a window of opportunity to get a better rate, before the gender-neutrality law comes into effect in December.

That said, there is also the question of what may happen on the stockmarkets (quite possibly affecting the value of your pension fund, unless you're in cash), and the bond markets (which influence annuity rates).

Time to review when you want to take your pension, what it's invested in at the moment, and how you ultimately intend to take the benefits?

I suggest you contact your adviser soon!

INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Urgent need for UK consumers to review pensions and investments

Changes on their way mean that it's high time to review your insurance - and pensions.

Gender-neutrality law to increase costs for both men and women

By 21st December this year, the UK insurance industry will have to comply with the EU Gender Directive, which insists that men and women must be treated the same when setting rates. Up to now, by and large:

• women tend to pay less for car insurance (typically, safer driver behaviour than men's) and life insurance (on average, women live longer than men)
• men tend to get better annuity rates when taking benefits from their pensions, and pay less for income insurance

You might think that the fair thing to do, where gender-related pricing is concerned, is "meet in the middle", but that means the insurance company takes the risk that it may attract more business from the gender that will ultimately cost them more in payouts. So it could well be that the policy adopted will be to "level-up" premiums.

Time to get a product with guaranteed (i.e. fixed) premiums?

Taxation of life companies likely to increase premiums

But there's another change that will affect premiums, and it's to do with tax. Until now, life companies have been able to offset some of their insurance costs against gains on their investment business; this will stop from 1st January next year, so insurance premiums will no longer be subsidised by investment profits in this way. Actuaries have told HM Treasury (PDF) that this could raise premiums on some term insurances by around 10%.

Time to get a product with guaranteed (i.e. fixed) premiums?

Spouse cover and contracted-out pensions: better options now available

From April 6, 2012 the law on pensions has changed. Up to now, if you were married and some of your personal pension was built up using money from contracting-out of State top-up pensions (SERPS/S2P), that part of your pension fund had to provide a continuing income for your spouse if you died before him/her. This restriction has now been removed.

This means:

• you can have a bigger pension income for yourself, if you opt not to include spouse protection (it may be that your spouse already has good pension benefits of his/her own), but alternatively...
• if you prefer, you can IMPROVE spouse protection - before April 6, the spouse pension based on contracted-out monies HAD to drop to 50% of the income you were getting; now, it can be anything from 0% - 100% of yours.

For men who want a single-life annuity, this may also be a window of opportunity to get a better rate, before the gender-neutrality law comes into effect in December.

That said, there is also the question of what may happen on the stockmarkets (quite possibly affecting the value of your pension fund, unless you're in cash), and the bond markets (which influence annuity rates).

Time to review when you want to take your pension, what it's invested in at the moment, and how you ultimately intend to take the benefits?

I suggest you contact your adviser soon!

INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.

Plain packaging for political parties: the debate continues

How it might look:

Is there a limit to wealth inequality?

What would happen if one person in the USA finally owned ALL its wealth?

Not possible, I suppose, because two of the three functions of money would be impossible: there would be nothing to act as a medium of exchange, or as a unit of account, until the omni-owner started to spend. And why would he spend? He would already own everything. Having no property, everyone else would be a slave.

So what is the theoretical maximum degree of financial inequality? And how close are we to that point?

Source: http://aattp.blogspot.co.uk/2012_01_01_archive.html

Is this why the stockmarkets are stalling - there's not much wealth left to transfer to the upper crust, and what there is, the middle class are desperate to hang onto? Is that why, according to Tyler Durden, there's $8.1 trillion in cash holding off from investment - the rich won't put it back in unless they can pull out again at a profit, and the rest don't want to fall for the trick?

Why Britain is utterly, terminally stuffed

I live in Birmingham (UK), where our car industry was taken over first by the Germans and then (partially, though they also tried to raid us for other paperwork and designs that weren't part of the deal) by the Chinese. More could have been saved earlier, but the Rover crisis came to a head as the then Labour Government, facing re-election, chickened out of accepting a venture capitalist plan from Alchemy, since this would mean admitting that the plant had to shrink. The politicians lied that the land the factory was built on couldn't be used for housing and retail, because of ground pollution; now, the land has been cleared for exactly those purposes. Trust the British Labour Party to betray workers in order to get workers' votes.

We have also recently seen philanthropic chocolate makers Cadbury's fall into American hands (a company headed by a lady who reminds me of the frightening nurse in Mel Brooks' "High Anxiety"). And HP (for Houses of Parliament, ironically) Sauce has been bought by the US (Heinz), production has been transferred to the Netherlands and the factory here has closed.

Birmingham looks different, these days.

In today's Daily Mail, Alex Brummer paints the bigger picture of the national garage sale that is UK plc. Company directors, bankers and hedge funds have all made out like bandits (to use a Matt Taibbi expression) and the UK government has been happy to let them do it, cheered by the prospect of short-term revenue and the illusion of economic prosperity as the new rich shovelled cash into the stockmarket after buying up the best bits of London and the South-East. Brummer traces the Dolorous Stroke back to the Tories in 1979 (Chancellor Howe's relaxation of foreign investment rules) and 1986 (the financial services sector's Big Bang). Trust the British Conservative Party to betray the middle and aspirant working classes in order to get their votes.

The downside of this prolonged boss' jolly is the loss of future income to overseas interests, the withering of our patent base (now 39% foreign owned) and R&D activity, the decline in industrial skills and, inevitably, our country's ultimate ruination.

Elsewhere in the same edition of the Mail (a paper hated by bien-pensant comedians) is the reported displeasure of Scottish National Party leader Alex Salmond (I sometimes call our cat I-Lick-Salmon) at a spoof in the Economist magazine, which suggests (as I have long thought) that independence for Scotland is a romantic and economically self-destructive dream. It's tempting to think that the rest of the nation would be financially better off without Salmond's land, but that's the same sort of flawed short-term analysis as the one Brummer describes. It's clear, is it not, that the EU plan for splitting and regionalizing the UK is a sort of long-brewed adolescent revenge for owing us their hastily cobbled-together postwar democracies, and they're now trying to haul us out of the jollyboat and onto the deck of the Euranic just after the funny-money (read Bill Black's latest) iceberg has slit their hull.

Action points:

• don't depend on the State being able to maintain public sector and State pensions in future
• prepare your children for life and a career abroad
• if you're young enough, consider leaving before the social compact falls apart

Syria and the Great Game

If all you go by is the radio and TV news here, President Assad is a bad man. This has only been discovered recently, which is why it's taken us until now to do something about it. Fortunately our friends in Turkey are joining in, and Gulf States are generously funding the struggle of the oppressed against him. The TV is showing us exciting but also horrid footage of things going bang, rifles being fired; please make it all go away so everyone can be nice to each other again, we say.

Or is this part of a bigger picture? Russia resurgent, China emergent, America's problems getting urgent. Oil getting short, allies being bought, civil wars being fought in non-aligned states.

Great nations are foolish if they take each other on directly - the cost is so high economically and socially that the ruling classes risk overthrow from within. What you do instead is draw other countries into your team, and if their leaders insist on standing apart, you undermine them so they'll be replaced with someone more compliant.

Isn't that what happened in Libya, and is going on in Syria? Maybe Tunisia and Egypt, too?

Kill people and save money: a libertarian proposal

Day after day, I read the same thing: government is evil per se, and we shouldn't have to pay any taxes. The old and poor are a burden on the rest of us.

So are the sick and disabled, but the time for overt Nazism isn't quite yet. However, we are making encouraging progress.

Since 1967, some 7 million unborn British children have been killed. Some of them on grounds of "serious handicap" such as having a cleft palate (shame they didn't get Lord Byron, with his club foot) - but the overwhelming majority of abortions are simply because the child is inconvenient. That's against the law as it stands, but who cares?

This old-style-Oriental solution to problems (Stalin would surely have approved) is weighted towards the lower social classes so, as the authors of "Freakonomics" pointed out, it has a beneficial side effect, in that we're executing common criminals before their career can begin. And compared with the cost of arrest, trial, appeal, imprisonment etc a little fake-objective "pregnancy advice" and a swish of the scalpel are so much cheaper, quicker and final. After all, since 1965 we can't kill adult criminals and despite what Parliament was promised in return for giving up the death penalty, "life" doesn't mean life in jail except in the rarest of cases.

Like so much other bad law and practice, self-deception, poor logic and inconsistency bedevil our approach. Apparently it's okay to terminate a foetus under 24 weeks old, because it doesn't feel pain and is therefore not alive; so with the prior use of a really good anaesthetic, we could make inroads on the prison population right now.

We're doing this already for the sick and depressed, but first we have to send them to Switzerland, sometimes accompanied by a popular children's author who lards his work with references to death and total spiritual annihilation. However, the courts are winking indulgently at those who top their relatives here and are now paving the way for advance carte blanche so the doctors involved won't be prosecuted.

Really, criminals are the glaring exception to our enthusiasm for the short way with those who trouble us.

And after that, we can have a really good go at all those born with deformities (not just the ones whose mum doesn't want them), plus cripples, orphans etc.  Worldwide, there's something like 5 million new cases of people permanently disabled each year because of road accidents alone, so there's much to do. And we could always reinstitute forcible sterilization, which was a policy in many countries but which the Germans did so much more thoroughly, as they do everything. In short, let us off anyone who costs more in taxes than he's paying.

Yes, death is not the end, it's the answer. After we have rid ourselves in this way of all social and fiscal burdens, we shall have a thousand years of peace and prosperity. Those who still have life will have liberty, and only libertarians will live.

And money, dear money, the fount and origin of happiness, the fifth element that creates and sustains all, will be safe at last.