Prudential study reveals one in six will retire with no pension

Fri, 13 Apr 2012 09:55:34 GMT

Prudential's Class of 2012 study has revealed that one in six people (16 per cent) planning to retire this year will depend on the State Pension to fund their retirement as they have no other pension.

The figures come from Prudential's Class of 2012 research, which provides insights into the financial expectations of Britons planning to retire this year.

Women are more than twice as likely as men to have no pension; 20 per cent of women retiring in 2012 will depend on the State Pension compared with just 8 per cent of men.

The average person planning to retire this year will look to the State for 34 per cent of their income, with State Pension payments set to rise to £107.45 a week for single people from the 6th April 2012. Company pensions (35 per cent) are the second highest source of income and the remaining 30% comes from a mixture of savings, investments, personal pension savings, part time work and money from family members.

The Prudential research also shows that one quarter (26 per cent) of people retiring this year either overestimate by more than £500 a year what the State Pension pays, or simply do not know.

Vince Smith-Hughes, retirement income expert at Prudential, said: "While the State Pension is a safety net for pensioners in the UK, it should only ever be regarded as part of an overall retirement plan.

"For far too many people, the State Pension has become the default income option in retirement. Even those who have some private provision depend so heavily on the State that it makes up a third of their retirement income.

"Although State Pension levels will rise to £107.45 for single people per week on Friday, this will still only provide relatively low levels of income to people in retirement. It’s a weak safety net for those without any savings and the real income shock for many retirees will come when the gap between their current earnings and the State Pension becomes apparent.

"If people want to maintain their standard of living in retirement it is important that they start to save as much as possible as early as possible, and the vast majority should join company pension schemes where possible. Seeking early advice from a financial adviser should also be a prerequisite to helping people achieve the level of retirement income they want and need."

Regionally, people retiring this year in the Midlands are the most likely in the UK to rely on the State Pension (40 per cent). This compares with a quarter (28 per cent) of those in Scotland, who claim that they will be the least reliant on the state for their retirement income.

-ENDS

Notes to Editors:
Online survey conducted by Research Plus between 2nd and 12th December 2011 among 9,614 UK non-retired adults aged 45+, including 1,003 retiring in 2012.

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial services including retirement planning, life assurance, and advice on pensions.

SCS encourages UK organisations to prepare for impact of new pension rules

Thu, 22 Mar 2012 16:06:15 GMT

Payroll specialist SCS has warned that UK enterprises could face significant rising costs if they fail to plan adequately for the introduction of the DWP’s latest legislation on workplace pensions.

From October the Auto-Enrolment scheme will see all eligible workers automatically signed up to their employer’s pension scheme. Designed to address a situation where many workers fail to take up valuable pension benefits because they do not make an application to join their employer’s scheme, experts are concerned that the implementation of the legislation could ultimately prove expensive if organisations do not take steps to implement strategies that reduce the cost and impact of the rule changes.

“This is a crucial time for organisations affected by the Auto-Enrolment legislation. Organisations that panic and throw themselves into the numerous one-size-fits-all schemes run by pension and payroll providers - and operations that leave it too late to have much choice in the matter - run the risk of presiding over escalating long term costs, based on increased manual intervention,” said SCS Managing Director Tim Markham.

“The time for action on this issue is now no matter what size of organisation. Organisations that connect with trusted expert partners, plan their response carefully and implement it in good time will not only retain control of the situation, but also stand to minimise both the costs and the operational impact of the scheme.” Auto enrolment begins for larger organisations in late 2012, after which point these organisations will be compelled to automatically sign all employees, aged 22 and over earning
more than £7,475 a year, into to a workplace pension scheme. All organisations with more than 800 employees will have to implement the changes by the end of 2013, with all remaining organisations subject to the legislation, by the end of 2016.

A number of pension providers have entered the market to offer completely outsourced plans for employers struggling to cope with the changes, but such arrangements are widely acknowledged to be the most expensive option.

SCS’ conviction that a planned approach to the legislation can deliver multiple benefits is based on its experience helping a range of organisations prepare for its introduction. Unique in that it is in a position to create bespoke payroll solutions for these organisations, the company has the capability to tailor its core tools, taking account of each organisation’s unique requirements.
Some of these organisations have chosen to review their Payroll and Human Resources solutions during this period and SCS has been able to assist them in implementing new and innovative solutions.
With over 30 years’ experience in HR and Payroll solutions, SCS has helped a range of organisations take away the stress associated with preparing for new legislation. The company serves as a trusted advisor, helping to guide enterprises through the potential
minefields while attempting to identify areas for improvement and introducing efficiencies.
Markham added: “You could continue to struggle with the enormous burden placed on your shoulders by the new legislation or you could take this opportunity to try a better way of managing your HR and Payroll solutions. Which way do you want to go?”

“This is a no-brainer: organisations need to review their Human Resources and Payroll operations carefully, assessing exactly how they will be affected by the legislation’s introduction and begin planning their strategic response to it as a matter of some urgency.
The alternative simply isn’t viable.”

Hays research shows low morale in public sector workers

Tue, 03 Jan 2012 12:10:49 GMT

Hays, the leading recruitment specialists, has revealed research showing that disillusioned public sector workers appear to have hit a new morale low going into 2012. The research showed that more than half (52%) of job seekers said they would be prepared to sacrifice their pension for a career in the private sector, and nearly two thirds of workers considering the public sector a worse place to work following the recession.

The preliminary findings of the Hays Career Outlook Survey (undertaken in Nov/Dec 2011) show that although those working in the public sector are fiercely defensive of their pensions, the pull of the private sector and its perceived higher job security is attractive to job seekers.

Other early findings from the research show over three-quarters (84%) of public sector employers are concerned that they will struggle to keep skilled workers, and almost half (46%) say they will be unable to attract the skilled people needed for the twelve months ahead. 80% believe this will have an impact on the delivery of public services.

Almost two-thirds (60%) of public sector workers said the public sector is a worse place to work compared to before the recession, compared to only 40% in the private sector. Over three-quarters (76%) of public sector employers believe the sector is more stressful now than it was a year ago.

Andy Robling, Public Services Director at Hays, said: "These results indicate the potential dangers ahead for the public sector if something is not done to address poor morale and the perceptions some workers have about what the two sectors offer in terms of career progression and job security.

"The news that over half of workers in the public sector, who often choose work there to make a positive difference to society, would consider trading in their pension for a career in the private sector underlines how keen they are to move. Whilst conditions in the private sector are challenging too it is clearly one step ahead of the public sector in terms of attracting and motivating talent."

Heading into the New Year, both sectors report difficult working conditions, with employers describing morale as ‘pressured’ (45% of public sector employers, 46% in the private), and results from the survey show that their employees agree. Public sector employers lay the blame for this at the government’s door, while their private sector counterparts blame the global economy. Early data indicates a lack of career progression in both sectors is also causing a problem for staff.

Robling concluded: “In order to be in a position to tackle these important challenges in 2012, it’s vital that employers in both sectors take action now."

- ends -

About the survey
The findings are based on an online survey of over 955 employers (577 public sector and 381 private sector from across the UK) and 1380 employees in both the public and private sectors (716 public sector and 669 private sector).

About Hays
Hays plc (the "Group") is a leading global professional recruiting group. The Group is the expert at recruiting qualified, professional and skilled people worldwide, being the market leader in the UK and Asia Pacific and one of the market leaders in Continental Europe and Latin America. The Group operates across the private and public sectors, dealing in permanent positions, contract roles and temporary assignments. Specialist roles recruited for include construction jobs, IT jobs, marketing jobs, financial services jobs and public sector jobs.

PR contact:
Emma Price
Hays
Stockley House
130 Wilton Road
London
SW1V 1LQ
020 7259 8821
http://www.hays.co.uk/

Prudential reveals research on the importance of women's retirement plans

Wed, 02 Nov 2011 15:06:26 GMT

Prudential has revealed that nearly half (46 per cent) of women over the age of 40 who live with a partner have no pension of their own, according to new research into couples' attitudes to retirement.

The extent of women's reliance on a partner's pension and the State is not the only shock finding from the research, which also highlights that many UK couples could be sleep-walking into retirement poverty as they have no idea what pension income they will need to live on.

More than half (56 per cent) of couples aged over 40 have not worked out how much money they will need to live on in retirement, with two in five (40 per cent) admitting to having no financial plans in place for life after work.

British couples also seem reluctant to discuss with each other the finances that will support them in later life. One in five couples (20 per cent) admit to never having discussed joint retirement financial planning, while only half of those who have already retired made a joint decision about the annuity they bought.

Vince Smith-Hughes, head of business development at Prudential, said: "Pensions may not seem like the most exciting topic for a couple in their forties to be discussing, but couples who have not put time aside to discuss their retirement income plans run the risk of spending their later lives worse off than they had expected."

In regard to retirement planning, Smith-Hughes stressed how important it is for women to discuss their future finances with their partner, and preferably with a financial adviser too. According to Smith-Hughes, women who don't engage in these discussions could find themselves in financial trouble, especially if they outlive their loved one.

Smith-Hughes continued: "People may feel they can't afford to significantly boost their retirement savings in the current financial climate, but taking even the smallest of steps can have a positive impact. Joining a workplace pension scheme, considering a joint life annuity, so the income will continue after one partner dies, and topping up National Insurance contributions are all options which can increase income in retirement. These crucial issues should be discussed between couples and, in turn, with their financial advisers."

- ENDS -

Note to Editors
Research by Vision Critical, on behalf of Prudential, was conducted among a sample of 2,003 people, including 501 retired, 324 semi-retired and working part-time, and 1,178 aged 40+ working full-time and living with their partner/spouse.

Prudential reports Britons favour spending on holidays over saving for retirement

Wed, 12 Oct 2011 15:13:57 GMT

Prudential has revealed that nearly three million working age adults will prioritise going on holiday over continuing to save for their retirement as their finances are squeezed.

The survey asked non-retired adults in the UK to outline their spending priorities when faced with a reduction in monthly expenditure as incomes are frozen for many and living costs increase.

Prudential's research also found that an estimated 2.5 million Britons (or 10 per cent of those who have started saving for retirement would, if forced to make the choice, continue to spend money on nights out with friends and trips to the cinema ahead of maintaining payments into their pensions.

In a similar vein, more than 2 million would choose clothes shopping or going to the hairdresser ahead of payments into their retirement savings.

The figures highlight how saving for retirement is less of a priority for many in the current financial climate. Having previously revealed that more than 1 in 3 non-retired UK adults have no private or company pension, Prudential's research has also found that almost a quarter wait until they are 31 years old before paying anything into a pension.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Given the choice, many of us would opt for the immediate benefits of a holiday or a night out with our friends over saving for retirement. However, I'm sure we would all like to be able to continue topping up our tans occasionally or going out for meals after we have retired. So it is really important to strike a balance and keep building up a pension that can support the lifestyle we want to have in later life.

"As people tighten their belts it is important to think about the long-term impact of financial decisions and spending patterns. Those looking to maximise their retirement income should start saving as much as possible as early as possible in their working lives. Even small contributions can make a significant difference to a pension if invested early. And a consultation with a professional financial adviser will help you make the right long-term and short-term financial decisions."

Notes to Editors
Prudential's insights based on an online survey of 1,602 non-retired adults in the UK, conducted by Research Plus in August 2011. The numbers of non-retired adults in each category above have been estimated using the Office of National Statistics data relating to the number of non-retired UK adults (37.73 million).

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including private pensions, retirement planning, life assurance, advice on money saving and pension advice.

Prudential reveals more than a third put their pension savings on hold

Mon, 10 Oct 2011 10:56:34 GMT

Prudential has revealed new research which shows more than a third (35 per cent) of British adults who are yet to retire have stopped paying into their pension pots.

The results of the nationwide study show that one in three (33 per cent) of those who have put pension payments on hold have done so because they are out of work, while over a quarter (27 per cent) say that they can no longer afford the contributions.

More than two-fifths (43 per cent) of those who have stopped paying into their pensions do not plan to start again, despite the long-term impact it will have on their retirement income.

Prudential's calculations show that irregular contributions could reduce the values of savers' pensions by thousands of pounds. In fact, a saver who misses a year of gross contributions of £2,400 could see their final pension fund reduced by £7,000*.

Vince Smith-Hughes, head of business development at Prudential, said: "Tightening your belt when times are hard is sometimes necessary, and putting pension contributions on hold might seem an easy way to save money; however, neglecting pensions today means throwing money away tomorrow, as savers will miss out on perks, such as tax relief and employer contributions.

"Abandoning your pension pot really should be a last resort when times are tough. By getting into the routine of saving into a pension as early as possible, savers will be able to ensure the comfortable retirement that they deserve."

- ENDS -

Notes to Editors
Prudential’s insights based on a survey of 1,602 non-retired adults in the UK, conducted by Research
Plus in August 2011.
*Statistics are based on Prudential's Flexible Retirement Plan, and assume a 7 per cent growth.

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including private pension products, life assurance, advice on money saving and pension advice.

Prudential reveals one in three UK workers don't have a pension

Thu, 15 Sep 2011 15:50:02 GMT

Prudential has revealed that more than one in three (35 per cent) workers in the UK admit that they don't have a pension, meaning that they will have to rely on the State Pension and any savings in retirement.

The survey of 1,600 working adults also found that those who do contribute to a company or private pension pay in an average of 6.2 per cent of their annual incomes. Women are far less likely to save for their retirement with 41 per cent saying they do not have a pension, compared with 29 per cent of men.

To make matters worse for those who do not save into a pension fund, as well as facing a sharp drop in income at retirement, they are also missing out on significant tax relief during their working lives. Office of National Statistics figures suggest that the average worker in the UK earns nearly £1 million over the course of their working lives. An individual making the average pension contribution of 6.2 per cent of this income could receive a total of more than £15,000 in pension tax relief.

While the average tax relief on pension contributions is £334 per year for a person paying the basic rate of tax, higher rate taxpayers stand to lose substantially more by not paying into a pension scheme.

Vince Smith-Hughes, head of business development at Prudential, said: "Failing to save into a pension means not only having to rely solely on the State Pension in retirement, but also missing out on the 'free money boosts' which come with pensions, such as tax relief and employer contributions.

"Making regular pension contributions is a vital part of securing a comfortable retirement. Although saving for retirement may not be a priority for young people, the more money which is stashed away from an early age, the more likely that significant rewards will be reaped later in life.

"When coupled with the benefits of any additional employer contributions or gains through fund performance, a pension is the best way of saving for retirement, for many people. In order to maximise pension benefits, to understand the impact of tax relief, and ultimately to secure a decent retirement income, it’s important to seek professional financial advice."

- Ends -

Notes to Editors
- Prudential's insights are based on a survey of 1,602 non-retired adults in the UK, conducted by Research Plus in August 2011
- An individual earning £60,000, and making a typical pension contribution, will receive £2,480 a year in tax relief; someone earning £100,000 will receive £4,133. Analysis of lifetime earnings and total UK working population based on the Office for National Statistics 2010 Annual Survey of Hours and Earnings (ASHE)
- Tax relief calculation based on median earnings taken from the 2010 ASHE across an individual's lifetime, based on current tax rates and thresholds, and a typical pension contribution of 6.2%

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including pensions, life assurance, advice on planning for retirement, which includes pension advice and annuity service.

Standard Life reveals commitment peak begins at 35 for average person in the UK

Thu, 08 Sep 2011 12:41:40 GMT

Standard Life has published 'Your Commitments, Your Future', a study developed with psychologist Professor Janet Reibstein into the nature of commitment. It reveals that financial and emotional commitments peak between 35-44 years of age when people spend on average £1,160 a month on financial commitments and think about them for 45 minutes every day.

The research reveals that during a lifetime, the average person spends £914 a month on financial commitments and 37 minutes thinking about them everyday. In contrast, they spend £87 a month on emotional commitments, thinking about them for 2 hours, 18 minutes every day.

According to the Standard Life study there are three core commitment life stages with transition phases in between:

- Commitment Sleepwalkers (18-24) who have a smaller amount of financial and personal relationship commitments. Their regular financial commitments amount to just £458 a month. They spend the least amount of time thinking about their finances so are at risk of overlooking the long term cumulative affects of these costs.

- The Fully Committed (35-44) who are at the peak of their regular financial commitments, spending an average of £1,160 each month and likely to be paying a mortgage, looking after a child and paying off any debt accrued in earlier life.

- Commitment Slowdowns (55+) who are starting to become less financially and emotionally committed. They are spending £818 on their commitments each month, almost £100 less that the average.

Commenting on the research findings, Professor Reibstein said: "'Your Commitments, Your Future' shows a discrepancy in how much attention we devote to our financial and emotional commitments. We spend over two hours a day thinking about emotional commitments, but just 37 minutes on our financial commitments.

"People consider financial commitments as something abstract, separate to their emotional life. But our finances underpin our most important relationships and often our ability to achieve our future goals. The Standard Life report makes it clear how vital it is for people to engage with their finances, their personal relationships and future aspirations as one single entity."

Standard Life's John Lawson added: "'Your Commitments, Your Future' breaks our commitments down into life stages, giving a clear picture of how our commitments change throughout our life. This understanding can help substantially with planning our personal finances so that we can feel confident about the future and achieve our goals. It’s clear that financial commitments can support our relationships - they underpin them. If people were to dedicate more time to their long term financial planning, they wouldn’t just be better off financially, they’re likely to be better off all round."

The full 'Your Commitments, Your Future' report is available at www.knowyourcommitments.co.uk where people can also compare their financial and emotional commitment profile by using an interactive tool and watch Professor Reibstein analysing commitment in more detail.

-ends-

Notes to Editors:
- All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2016 adults. Fieldwork was undertaken between 17th - 20th June 2011. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+).
- Methodology: This survey has been conducted using an online interview administered by members of the YouGov Plc GB panel of 300,000+ individuals who have agreed to take part in surveys.

About Standard Life:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides life assurance, annuities, life insurance, savings products such as a stock and shares ISA, investment bonds, tax efficiencies, pension products such as a self invested personal pension, financial education and investment management to around 6 million customers worldwide.

Prudential reports pensioners set to lose £2.9 billion of spending power over next 12 months

Tue, 23 Aug 2011 11:01:33 GMT

Prudential has reported that pensioners in the UK with additional savings held in cash ISAs, savings accounts and current accounts could see their spending power fall by an average of £278 each in the next 12 months, according to new analysis. The calculations show that the combined effects of increased inflation and low interest rates will erode pensioner buying power by a total of £2.9 billion in the coming year.

Pensioners are seeing their cost of living rise 44 per cent faster than the current rate of inflation. This is because a greater proportion of their income is spent on goods and services with prices that are rising ahead of inflation, like fuel and food.

The average pensioner has £19,664 in additional savings, but is likely to see their purchasing power fall considerably as the gap between the interest rates paid on savings and the rate of Silver RPI eats into the value of cash nest eggs in real terms.

According to recent research by Age UK, the average annual inflation recorded by the Retail Prices Index (RPI) has been 3.1 per cent in the period since January 2008. Silver RPI over the same period has averaged 4.6 per cent - resulting in an annual rate of inflation for pensioners that is nearly 50 per cent higher.

Vince Smith Hughes, Head of Business Development at Prudential, said: "Low interest rates and rising Silver RPI mean that many pensioners are particularly feeling the squeeze, and for those who rely on interest paying savings accounts to top up their income the challenge is even greater.

"As most people in Britain feel the financial pressure of rising living costs, pensioners on fixed retirement incomes are facing even higher levels of inflation and are suffering disproportionately.

"We strongly encourage people to speak to a financial adviser to ensure they are making the best use of income-generating investments, bonds and pension funds where relevant, in order to ensure their income has the potential to rise and combat increasing inflation and living costs."

- ENDS -

Notes to Editors:
Pensioner inflation figures based on data from 'Age UK Enterprises Silver RPI - Measuring the true impact of inflation on those in later life' – 11 May 2011.
(www.ageuk.org.uk/Documents/EN-GB/silver_rpi_wave_3_white_paper.pdf?dtrk=true)

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including money advice, life assurance, bond investment, a tax calculator and retirement plans, which includes pensions and pension service.

Prudential reveals retirement income gender gap is £6,500 a year

Tue, 28 Jun 2011 11:27:07 GMT

Prudential has announced that men retiring in 2011 expect to receive 50 per cent more pension income than women, according to new Prudential's Class of 2011 research.

Prudential's Class of 2011 research surveyed people planning to retire this year and found that the retirement income gender gap is £6,500. The average woman retiring this year expects an annual income of £12,900 compared with an average expected male income of £19,400.

There is some good news for women though as the retirement income gender gap has shrunk since last year when Prudential's study showed a £7,400 gap with women expecting incomes of £12,200 while men looked forward to £19,600. However, women who planned to retire in 2009 expected an annual retirement income of £13,700.

The research found that people planning to retire in 2011 expect to have an average income of £16,600 – marginally higher than 2010's figure of £16,500.

Vince Smith-Hughes, head of business development at Prudential, said: "It is good news that average retirement incomes for women have risen, but unfortunately the gender gap remains stubbornly wide.

"There are a number of actions that women can take to help to boost their retirement income. For example, it is a good idea to maintain pension contributions during any career breaks and to explore making voluntary National Insurance contributions after returning to work.

"It is imperative for anyone looking to secure sufficient retirement income to start saving as much as they can, as early as they can and to seek professional financial advice when they are planning to retire."

The retirement income gender gap is at its widest in the South West of England where retired women expect £11,700 a year less than men. Meanwhile in the South East of England the expected retirement incomes for men and women are essentially equal.

The Prudential study also found that 28 per cent of women planning to retire this year have no savings in private or company individual pension schemes compared with just 10 per cent of men.

Notes to Editors:
Prudential's Class of surveys were conducted by Research Plus using an online methodology: 2011 survey conducted 6-14 December 2010 among 10,143 UK non-retired adults aged 45+ including 1,005 planning to retire in 2011. The 2010 study was conducted 3-10 December 2009 among 6,073 UK non-retired adults aged 45+ including 1,001 planning to retire in 2010. Class of 2009 study conducted 10-18 November 2008 among 7,685 UK non-retired adults aged 45+ including 1,000 planning to retire in 2009.

About Prudential:
'Prudential' is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including annuities, life assurance, bond investment, a tax calculator and retirement plans, which include pension plan and pension annuity tips.

Standard Life warns public to inflation proof retirement incomes

Thu, 16 Jun 2011 10:40:14 GMT

Standard Life is warning anyone thinking about retirement to consider the effects of inflation eroding their income. New data released today by the savings and investments specialist shows that many people could see their retirement income swallowed up by the basic costs of living within seven years, as the effect of inflation impacts their spending power.

Using Office for National Statistics data and official Government inflation figures, Standard Life has calculated that someone with a personal pension pot of £80,000, buying a level annuity, will spend their entire monthly income (from private and state pensions) on basic living costs like food and fuel within just 7 years of retirement*.

John Lawson, Head of Pensions Policy at Standard Life said: “The cost of living is rising fast for most people in the UK, but this can be particularly acute for pensioners. Their spending habits are driven by commodities such as food and fuel bills and these inflation rates are much higher than the overall UK inflation rate**.

"People need to consider how to protect their buying power in retirement from the ravages of inflation over a long period of time, which could be 30 years or more. If pensioner inflation remains at around 6% a year, people with a fixed income could lose almost half of their spending power within a ten year period.

"There are many options to consider at retirement which could minimise the impact of inflation on your income, so seeking professional financial advice is vital."

For further information on inflation proofing retirement income, and the choices available, interested parties can visit www.standardlife.co.uk/retirement_solutions/search.html.

Notes to Editors:
*Couple, male aged 65 and female aged 62, with a £80,000 pension fund who have purchased an annuity
** For example, see Age UK, 'silver RPI', www.ageuk.org.uk/latest-press/archive/silver-rpi-impact-of-inflation-for-those-in-later-life/.

About Standard Life:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides ISAs, life assurance, annuities, mutual funds, investment bonds, tax efficiencies, pension planning advice, and investment management to over 6.5 million customers worldwide.

Standard Life reveals one in eight UK adult can't wait for greater reward

Thu, 26 May 2011 14:41:03 GMT

Standard Life, the long term savings and investments specialist, has conducted a poll and found that one in eight of UK adults adopt a 'live for the moment' culture and would choose the instant gratification of a £640 holiday this year, rather than be willing to wait five years for a holiday worth £5,000 instead.*

The figures come from Standard Life's UK-wide poll and prize draw**, in partnership with boutique hotel specialist i-escape.com, which investigates the nation's attitudes to planning for the future. Entrants have to vote on which prize they would prefer; a short break this year worth £640, or a holiday of a lifetime in five years time worth £5,000.

Standard Life's John Lawson said: "Planning five years ahead is something many people find difficult to imagine or do their best to avoid. Our poll shows that some people just seem too impatient to wait for greater rewards in the future, no matter how enticing they are. But being patient and taking a long term view on your finances is precisely what helps you achieve your goals and, ensures you remain financially secure. It might seem easier to take a short term view, but unless you plan ahead how else can you look forward to your future with confidence and optimism?"

Standard Life also points out that if everyone was this impatient, the world would be a far different place. If one in eight of the doctors employed by the NHS weren't patient enough to finish their studies, the UK would have 14,061 fewer doctors**. Inventions such as the Dyson vacuum cleaner may also have never been made if the inventor Mr James Dyson has been impatient, as it took five years to develop the iconic bagless vacuum cleaner***.

Notes to Editors:
* According to the Standard Life poll which runs online until 25 May 2011, 13% would choose a £640 holiday this year rather than a £5,000 in five years' time because they 'don't want to wait five years'. 6213 people have taken part in the poll so far and 825 (13%) chose a £640 holiday this year rather than a £5000 in five years' time for the reason that they 'don't want to wait five years'. A further 1057 (17%) said they wanted the short break now as they didn't know what they would be doing in five years' time.

** Daily Mail website.

*** 4 Vacuum Cleaner website.

About Standard Life:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides ISAs, life assurance, annuities, investment funds, investment bonds, tax efficiencies, pensions including self-invested personal pensions (SIPP) company pensions, stakeholder pensions and employer pensions, and investment management to over 6.5 million customers worldwide.

Standard Life reveals Brits think they cannot live on £140 a week

Fri, 20 May 2011 10:06:05 GMT

Standard Life's new research* has revealed that almost two out of three people (63%) think they could not live on £140 a week in retirement, rising to 72% for the 55 and over's. Only 17% of the 55 and over's think they could live on £140 a week. The Government has recently proposed a single-tier flat-rate state pension worth around £140 a week, and are currently consulting on how this might be introduced in 2015 at the earliest.

John Lawson, head of pensions policy at Standard Life said: "The introduction of state pensions of £140 a week for all is to be welcomed. This makes it clear and easy for people to understand what they will receive from the government as a pension. However, people clearly recognise that £140 a week will not likely be enough to live on in retirement."

The research also found there were significant differences of opinion between age groups, with the young more likely to think £140 a week was OK, while those in the older age ranges having had a reality check at the cost of living.

John Lawson concluded with tips for improving overall financial health: "Set up a savings plan to put money away for your future needs. Pensions and are enough to meet the savings needs of 99% of the population. If you are saving for a retirement income, a pension is the most tax efficient home for your money.

"Investing in cash, whilst generally safe, often means that your savings don't even keep pace with inflation, so don't be afraid to take some risk, particularly if you are investing for the longer-term. Savings providers now offer personalised investment portfolios, such as Standard Life's MyFolio, that match the level of risk you are comfortable with."

The Standard Life MyFolio** funds are a family of funds carefully constructed to achieve growth whilst minimising risk.

Notes to editors:
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,057 adults in the UK. Fieldwork was undertaken between 23rd and 25th March 2011. The survey was carried out online.

**MyFolio can be accessed via both a Stocks and Shares ISA and the Active Money Personal Pension. MyFolio is a family of carefully constructed risk-based portfolios, managed by Standard Life Investments. A committee oversees the fund research process and includes independent experts from outside the Standard Life group.

About Standard Life:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides ISAs, life assurance, annuities, investment funds, investment bonds, tax efficiencies, pensions including self-invested personal pensions (SIPP) company pensions, stakeholder pensions and employer pensions, and investment management to over 6.5 million customers worldwide.

Prudential UK enters into buy-in agreement with GlaxoSmithKline

Tue, 23 Nov 2010 11:24:26 GMT

Prudential UK has entered into two bulk annuity buy-in contracts with the Trustees of the GlaxoSmithKline ("GSK") Pension Scheme and the GSK Pension Fund for a tranche of pensioner members within their defined benefit pension schemes. The transactions cover around 15 per cent of GSK's UK defined benefit pensioner liabilities and have an aggregate value of approximately £900 million.

Under the terms of the agreement, GSK has purchased bulk annuity policies from Prudential which will take on responsibility for a portion of the pensioner benefits payable by the Trustees of the GSK Pension Scheme and Pension Fund. GSK will continue to administer the Scheme and Fund and the terms of the pension payments made to its scheme members will remain unchanged.

Andrew Crossley, deputy chief executive, Prudential UK & Europe, said: "Prudential has a unique set of capabilities in the annuities market including extensive longevity experience, a superior investment track record and operational scale. Our strategy for bulk annuities is to participate selectively in the market and only enter into transactions which meet our strict requirements for return on capital. This agreement demonstrates our ability to complete complex and innovative transactions within the bulk annuity marketplace.

"Our financial strength and strong track record continue to be significant factors for pension scheme trustees looking for a safe and secure home for their pensions. We believe that the GSK Pension Scheme and Pension Fund will benefit from our expertise and experience in the pensions and annuities markets."

This contract will be recorded for accounting purposes within Prudential's fourth quarter results for 2010.

Prudential offers customers pensions and annuities, pensions retirement income, insurance and investment opportunities.

Note to Editors:
The Prudential / GSK agreement is a 'buy-in' of annuities rather than a 'buy-out' of pension liabilities. A 'buy-in' is where a group annuity contract is bought as fund investments and held by the Trustees. It belongs to the pension fund, not individual members. The Trustees hold the policy as a fund asset to meet its liabilities, and receives income from it to pay pensioners.

In effect, the GSK Pension Scheme / Fund have chosen to invest in an annuity policy to hold alongside their other assets. Individual scheme members will not become Prudential policyholders as they would in a 'buy-out'. Instead, the Pensions Scheme / Fund will receive payments from Prudential which match the money the Trustees pay out to pensioners.

Prudential reports pensions death risk for unprepared couples

Fri, 29 Oct 2010 11:29:20 GMT

Prudential has conducted new research* that reveals more than half of UK adults aged 40-plus and who are not yet retired are at risk of losing all or part of their private pension income if one partner dies because they are failing to make any pension provision for each other.

The study reveals 39 per cent of couples do not have arrangements in place to ensure that pension income continues to be paid after the death of one partner, and another 13 per cent do not know what will happen to their retirement income and other investments if their partner dies.

Only 48 per cent have made arrangements to ensure that pension income will continue to be paid and it is men who are more likely than women to have made sure that happens. The study found 56 per cent of men have put arrangements in place compared with 43 per cent of women.

Prudential has launched an online guide for couples at pru.co.uk/couplesconversations which provides a decade by decade countdown on the financial issues they may need to tackle.

Vince Smith-Hughes, head of pensions development at Prudential, said: "Talking about money can be difficult enough for many couples but clearly talking about death and money is a step too far for millions.

"But it’s time to speak up if more than half of all working couples aged 40-plus do not have arrangements in place to ensure pension income will continue after the death of one of them. Losing some or all of your income in retirement is a terrible risk to take and couples should think carefully about what happens in the event of one partner's death, and seek advice where appropriate to ensure this eventuality is taken into account."

Vince Smith-Hughes added: "You can choose a joint life annuity which will pay an income to a spouse or dependent after your death and alternatively or as well as you can purchase a guarantee that the income will continue for a set period up to 10 years after the death of an annuitant.

"For those still not yet retired it is also worth ensuring that whoever administers your pension scheme has written instructions to ensure the wishes of the member for disbursement of the pension fund upon death are known."

But Prudential's research shows just 31 per cent of non-retired UK adults aged 40-plus have discussed with their partners what happens to pensions and other assets in the event of one of them dying.

And only 4 per cent have talked with their partners about the difference between joint life and single life annuities - which stop paying when the purchaser dies - and joint life annuities which continue to pay after the death of one partner.

Prudential's online guide covers topics such as making a will, discussing pensions and how much to save, talking about when to retire, working out retirement income, reviewing total savings, researching annuity options and when to buy, checking National Insurance contributions, talking about housing options, leaving an inheritance, and agreeing on long term care.

Notes to Editors
*Survey conducted by Research Plus between 6–14 July 2010 among 1,172 UK adults aged 40+
currently living with their spouse or partner. The research used an online methodology.

About Prudential:
"Prudential" is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including annuities, life assurance, investment bonds, pensions, a tax calculator and pension guide for those planning to retire. Registered Office at Laurence Pountney Hill, London EC4R 0HH. Registered number 15454. Authorised and regulated by the Financial Services Authority.

AEGON's Thoresen urges Government to cast off legacy of 'piecemeal approach' to savings reform

Thu, 23 Sep 2010 11:10:39 GMT

AEGON UK chief executive, Otto Thoresen, is today urging the Coalition Government to turn its back on its predecessor's piecemeal approach to pension and saving reform and carry out a holistic review of what motivates people to start saving and keep on saving.

Speaking at a Fringe meeting at the Liberal Democrats party conference, alongside pensions minister Steve Webb MP, Thoresen will call on the Government to do more to create a sustainable savings culture in the UK.

AEGON believes the Government has already made significant progress in reviewing some of the urgent aspects of pensions legislation, such as proposals for restricting higher rate tax relief and for automatic enrolment into pension schemes. However with additional reviews of the 'age 75' annuitisation rule and the default retirement age Thoresen believes the Government risks falling into the same trap as the previous Government by perpetuating a piecemeal approach to pension legislation.

Thoresen will warn that this type of approach undermines saving as it gives people the impression that the goalposts can be constantly moved. Instead he will call on the Government to harness the momentum for change by conducting a thorough review of what motivates people to start, and keep on, saving.

Thoresen will call on the Government to:

* re-examine the way financial incentives for saving and investment - such as tax relief for pension contributions and tax breaks for ISAs and investment in domestic property - fit together.
* consider the behavioural aspects of how people approach financial decision making. This can be harnessed, for example using automatic enrolment to harness the power of inertia. But at other times people's built-in biases and prejudices need to be overcome to help them achieve better financial outcomes.
* urgently look again at the need to develop different advice models. AEGON is concerned that the financial landscape is getting more complicated while the Retail Distribution Review threatens to limit access to advice to fewer people.

Otto Thoresen says:

'The UK faces huge challenges in dealing with the demands of an ageing population and creating the groundwork for a sustainable savings culture. The Coalition Government and the wider population are showing increasing appetite to tackle these challenges but we must go about it in the right way.

'We have a unique opportunity to harness the momentum for change and make a real difference to people's financial security. But we can only do this by ending our piecemeal approach to savings legislation. We must take a fresh look at what financial incentives and behavioural aspects encourage people to save, and make sure good financial advice is there for everyone who needs it.'
Notes to editors

* Otto Thoresen is speaking at an AEGON sponsored meeting at the Liberal Democrats party conference – Saving Britain: Will the UK ever achieve a savings culture? – organised in conjunction with Social Market Foundation. Other speakers are Steve Webb MP, Maggie Craig (ABI), Norma Cohen (FT) and James Lloyd (SMF).
* In the UK AEGON offers pensions, life insurance, asset management and financial advice to around two million customers. AEGON UK has assets under administration of £53.6 billion and employs approximately 4,000 staff in its life and pensions business, of which 2,400 are based in Edinburgh.
* As an international life insurance, pension and investment company based in The Hague, AEGON has approximately 28 thousand employees world wide and 40 million customers in the Americas, Europe and Asia. AEGON's revenue generating investments totalled EUR 409 billion at 30 June 2010.

For further information, pleace contact:

Margaret Robertson
Press Relations Manager
T. 0131 549 6798 | M. 07740 897527

AEGON UK makes senior appointments within its risk team

Wed, 08 Sep 2010 16:18:46 GMT

Leading life and pensions company, AEGON UK, today announced two key appointments within the company’s risk function, appointing Stephen McGee to the role of Insurance Risk Director/Actuarial Function Holder and Pauline Colvin to the role of Enterprise Risk Director.

Stephen McGee has over 16 years experience working in the UK life industry in finance and actuarial positions. A graduate of Glasgow University, Stephen joined Alba (formerly Britannia Life Limited) from University, before moving to Scottish Mutual in 1998. Working through various acquisitions and name changes, Stephen previously worked for Abbey National, Santander, Resolution, and Pearl, before leaving Phoenix group as Head of Actuarial in August 2010.

Reporting to AEGON UK’s Chief Risk Officer, Charles Garthwaite, Stephen will lead the development and implementation of AEGON UK's strategy for the management of insurance risk.

Pauline Colvin joins AEGON UK from AON UK where she was formerly Chief Risk Officer. Pauline, brings a wealth of insurance sector experience to AEGON UK, as she has previously worked for Skandia UK (Old Mutual), Royal & Sun Alliance, Pearl and AMP, in a variety of governance, risk and change management roles.

As Enterprise Risk Director, Pauline will take responsibility for AEGON UK’s operational, internal control, business continuity and financial crime risks, as well as supporting Charles Garthwaite, in developing AEGON’s organisation-wide risk management culture.

AEGON UK’s Chief Risk Officer, Charles Garthwaite said:

‘I am delighted to welcome both Stephen and Pauline to AEGON UK. Between them they bring an impressive breadth of knowledge and are valuable additions to our risk management team.

'Risk management is essential to companies, and will become increasingly so with the advent of Solvency II. Risk management activity is essential to supporting the business in the future. The wealth of experience and skills that both Stephen and Pauline bring will help us to develop a first class risk culture across AEGON UK.’
Notes to editors

* In the UK AEGON offers pensions, life insurance, asset management and financial advice to around two million customers. AEGON UK has assets under administration of £53.6 billion and employs approximately 4,500 staff.
* As an international life insurance, pension and investment company based in The Hague, AEGON has approximately 28 thousand employees world wide and 40 million customers in the Americas, Europe and Asia. AEGON's revenue generating investments totalled EUR 409 billion at 30 June 2010.

AEGON welcomes steps to make pensions legislation fit for the 21st century

Mon, 19 Jul 2010 12:19:27 GMT

AEGON says the Government’s consultation on ending the effective requirement to purchase an annuity at age 75 by 2011, published today, is a significant step towards making pensions legislation fit for retirement in the 21st century.

AEGON believes the current rule, which forces people to take retirement income by their 75th birthday, denies people the flexibility they need to manage their income needs in later life.

AEGON welcomes the review’s proposals to give people greater choice in how and when they take income and tax-free cash in retirement and ending the arbitrary cliff edge for tax on death benefits at age 75. However it also cautions that removing the age 75 trigger for action is likely to mean people will need more advice to help them make the right decisions on securing their retirement income.

AEGON also urges the Government to resist taking a piecemeal approach to further legislative changes. AEGON has previously called for an overhaul of the retirement tax rules to reflect increases in longevity and the changing nature of retirement. AEGON believes this is essential to create the more flexible framework future retirees will demand.

Kate Smith, Pensions Development Manager, says:

‘Overhauling antiquated rules to give people more choice is a very welcome move from the new Government. We have to recognise that retirement has changed and a fresh and more flexible approach is needed to meet the demands of a new generation of retirees.

‘But if we want a premier retirement framework that’s truly fit for purpose in 21st century UK we need to stop making changes in isolation. We must take this opportunity to have a complete overhaul of retirement rules and consider how they tie up with long-term care provision. We need to look at what will encourage people to start and keep on saving in a pension and how we can give them the flexibility and security in income they need as they move through the different stage of retirement. We look forward to working with the Government to achieve this aim.’

Notes to editors
AEGON published its suggestion for a holistic approach to reviewing retirement legislation in its Pensions Manifesto: The Pensions Crunch – proposals for change, in April 2010.
In the UK AEGON offers pensions, life insurance, asset management and financial advice to around two million customers. AEGON UK has assets under administration of £53.6 billion and employs approximately 4,500 staff.
As an international life insurance, pension and investment company based in The Hague, AEGON has businesses in over 20 markets in the Americas, Europe and Asia. AEGON companies employ approximately 28,000 people and serve some 40 million customers across the globe. AEGON’s revenue generating investments totalled EUR 388 billion at 31 March 2010.
For further information
Kate Smith
Pensions Development Manager
T. 0131 549 6445

Margaret Robertson
Press Relations Manager
T. 0131 549 6798 | M. 07740 897527

AEGON Welcomes Speedy Review of Automatic Enrolment

Thu, 24 Jun 2010 16:49:01 GMT

AEGON welcomes today’s announcement by the Department of Work and Pensions of a ‘thorough and speedy review’ of automatic enrolment into workplace pensions. AEGON says the terms of reference for the review mirror the calls made in its Pensions Manifesto published in the run up to the election.

AEGON suggests the speed of the review is particularly welcome as employers and providers need time to prepare for the reforms to avoid further slippage of the 2012 timetable.

The company is also encouraged by Steve Webb’s comment that the review is designed ‘to make sure that it pays to save’.

AEGON has repeatedly argued that concerns about the impact of means testing on pension savings must be addressed if the aim of pensions reform, to get more people saving more money for retirement, is to succeed.

AEGON has previously set out proposals to remove the groups most at risk of losing out through means testing in retirement by restricting the size of the automatic enrolment pool. AEGON proposes that:

· the automatic enrolment trigger should be doubled from £5,035 to around £10,000
· the upper age limit should be reduced to 55
AEGON also suggests that the burden on small businesses and the overall costs of the reforms could be reduced by exempting businesses with less than five employees, at least at outset. AEGON encourages the DWP to look closely at ways to simplify responsibilities for all employers to make it easier for them to implement the reforms.

Kate Smith, pensions development manager, said:

“AEGON has long argued that more needs to be done to reduce concerns about the impact on hard earned savings of means testing in retirement. Removing the most vulnerable groups from automatic enrolment would be a key step in the right direction. That’s not to say these people can’t join if they want, rather the default should be set so they would have to choose to opt in.

“It’s encouraging that the government is looking again at the auto enrolment criteria and plans a speedy review. Employers and providers need time to prepare if the timetable isn’t to slip further and we need to find ways to make it easier for employers to take on their new responsibilities. We look forward to working with the DWP to get a workable solution.”

-Ends-

For further information:
Margaret Robertson

Tel: 0131 549 6798

Mobile: 07740 897527

Kate Smith

Pensions Development Manager

Tel: 0131 549 6445

Notes to editors

· Details of the DWP review can be found at www.dwp.gov.uk/policy/pensions-reform/workplace-pension-reforms
· AEGON published it’s suggestions for a review of the automatic enrolment criteria in its Pensions Manifesto: The Pensions Crunch – proposals for change, in April 2010.

Prudential reports over a third of women face retirement poverty

Tue, 22 Jun 2010 11:03:21 GMT

Prudential has revealed new research that shows more than a third of women (35 per cent) planning to retire in 2010 will receive an income which is below the poverty line* - £14,000 a year or less - according to the latest findings** from Prudential's Class of 2010 retirement survey.

By comparison 29 per cent of men will face their retirement on an income of less than £14,000 a year.

The gender gap becomes even starker over the age of 65 where 42 per cent of women over 65 will have incomes below the poverty line compared with 33 per cent of men. According to the Joseph Rowntree Foundation, a single person in Britain needs to earn at least £13,900 a year before tax** in order to afford a basic, but acceptable standard of living.

Overall nearly a third (32 per cent) of people planning to retire in 2010 will have an income that falls below the poverty line.

Prudential’s research has also found that women’s mean expected retirement income is £12,169 a year, or 12 per cent below the £13,900 stated by the Joseph Rowntree Foundation, while men expect to receive a mean income of £19,593, or 41 per cent above the poverty line.

The findings reinforce the need for women to take pension savings and retirement planning matters into their own hands, according to Vince Smith-Hughes, Prudential’s head of business development for pensions. He said: "Women are more likely to take a career break when they start a family and possibly the last thing on your mind when you’re taking care of children and the home is how you’re going to fund your retirement years. But as these figures clearly demonstrate those years out of work do have an impact."

Ahead of the new coalition government's emergency budget on 22nd June, Prudential has said it is keen to work with government on the issues of saving for retirement and helping and encouraging people to save, regardless of gender.

"Evidently there is a vast difference between men’s and women’s anticipated retirement income and we believe government and the retirement savings industry can do more to encourage men and women to save more into pensions.

"Research published by Prudential earlier this year showed that 47 per cent of people believe they are financially well prepared for retirement, but the difference between perception and reality is vast, " added Vince Smith-Hughes.

"Clearly there is a discrepancy between what people believe constitutes being financially well prepared for retirement and the actual income required to ensure that you are. This is not something that you should begin thinking about the year you retire, it takes time to plan for retirement and to work out what the best way of utilising your funds is so that you have the income that you want and, more importantly, the income that you need for as long as you need it.

“People should seek advice early to make sure they are well prepared for a retirement, which could easily last for 20 years plus.”

Notes to Editors:
The information contained in Prudential UK's press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at pru.co.uk.

Sources
* A single person in Britain needs to earn at least £13,900 a year before tax in 2009, in order to afford a basic but acceptable standard of living, The Joseph Rowntree Foundation 2009,

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