Budget 2014: 'Pensioners should be free to buy Lamborghini,' says minister

[Peoplesoft bloke]

The people who issue annuities know people die, so it will only mean they can tailor it. If you've poor health you might get a better deal

Indeed, I plan to start smoking and drinking to excess in my retirement.

[d000hg]

Indeed, I plan to start smoking and drinking to excess in my retirement.

You have it backwards - if you only take up smoking in retirement your annuity will assume you are going to live a long time and pay badly. You need to get unhealthy before you buy the annuity, then clean up your act.

[Peoplesoft bloke]

You have it backwards - if you only take up smoking in retirement your annuity will assume you are going to live a long time and pay badly. You need to get unhealthy before you buy the annuity, then clean up your act.

Bugger!

[VectraMan]

You have it backwards - if you only take up smoking in retirement your annuity will assume you are going to live a long time and pay badly. You need to get unhealthy before you buy the annuity, then clean up your act.

Or find a way to fake bad health just as you're retire.

[Doggy Styles]

indeed I think they would be better off making annuities perform to a decent standard.

True.

But when you do the maths they couldn't be much better.

With average life expectancy rising significantly over the years, each person's pension fund has to be spread over a longer period than it used to.

And with low interest rates and low economic growth, fund growth has taken a hit as well.

So although I can see the attraction in trying to do better, where can people do better? The same issues apply to most other investments, unless you get lucky with a risky punt on the stock market. At least annuity income is (mostly) guaranteed and low risk.

[Smartie]

True.

With average life expectancy rising significantly over the years, each person's pension fund has to be spread over a longer period than it used to.

It has done until recently, however in the UK life expectancy fell over the last couple of years. Maybe it's a 'blip' or maybe obesity, cuts and poor care for the elderly contribute.
Either way, the life companies can't rely on increasing life expectancy as an excuse at the moment and neither can the government, though with their increases to the pension age they're really just playing catch-up.

[DaveB]

[Doggy Styles]

Not a good one. You don't have time to read a lot of it.