Women who could lose from pension reform

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’ NI contributions – but that will change from 2016. After that, only women who have paid the ‘married women’s stamp’ will qualify for state pension.

Annuity delay can be costly

Delaying your purchase of an 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, and we can ensure that you get the best rate by shopping around on your behalf.

How long can it last?

The surprising strength of world stockmarkets in the first few months of 2013 prompted the Sunday Times to ask how long it could last. More than a quarter of a set of economists polled by Reuters expected the FTSE100 Index to end 2013 at 7000 or above, compared with the recent high of 6700, and most of the pundits quoted by the paper were optimistic. The historic peak is 6,930, which was reached in December 1999. Breaking through that level would be a big milestone for investors.

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!

Ease the fees

Parents need to swot up on all the possible ways of meeting the costs of private education, says the Independent. While as many as a third of all pupils get some financial help through bursaries, most parents will need to use every trick in the book to meet the costs – among them using tax breaks on ISAs, saving in advance and tapping the grandparents. When you go through the costs, buying an expensive house in the catchment area of a good state school seems a relatively low-cost alternative.