Latest news with #pension
Yahoo
10 hours ago
- Business
- Yahoo
Milliman analysis: Competitive pension risk transfer costs continue to fall, slip to 100.2% during June
Competitive bidding process saves about 3.7% of buyout costs as of June 30 SEATTLE, July 22, 2025--(BUSINESS WIRE)--Milliman, Inc., a premier global consulting and actuarial firm, today announced the latest results of its Milliman Pension Buyout Index (MPBI). During June, the estimated cost to transfer retiree pension risk to an insurer in a competitive bidding process dropped from 100.8% to 100.2% of a plan's accounting liabilities (accumulated benefit obligation, or ABO). That means the estimated retiree pension risk transfer (PRT) cost is now 100.2% of a plan's ABO. During the same time period, the average annuity purchase cost across all insurers in our index fell from 104.4% to 103.9%. The competitive bidding process is estimated to save plan sponsors about 3.7% of PRT costs as of June 30, 2025. "The competitive annuity index showed additional improvement in June, getting even closer to break-even at 100.2%, as accounting rates fell even more than insurer annuity purchase rates," said Jake Pringle, Milliman principal and co-author of the MPBI. "This has been encouraging for plan sponsors, as deals seemed to heat up in the second quarter and many have PRT projects set to complete by the end of the year." The MPBI compares the FTSE Above Median AA Curve to the annuity purchase composite interest rates from nine insurers to estimate the competitive and average costs of a PRT annuity de-risking strategy. Individual plan annuity buyouts can vary based on plan size, complexity, and competitive landscape. View the complete Milliman Pension Buyout Index. To receive regular updates with Milliman's pension buyout analysis, contact us at pensionbuyout@ About Milliman Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits. Founded in 1947, Milliman is an independent firm with offices in major cities around the globe. Visit us at View source version on Contacts Jake PringleMilliman, +1 713 202 Errore nel recupero dei dati Effettua l'accesso per consultare il tuo portafoglio Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati Errore nel recupero dei dati
The Independent
11 hours ago
- Business
- The Independent
How to boost your pension pot now if you have no savings at all
Warnings that millions of people are heading for a retirement crisis due to a shortfall in pension savings are nothing new, but a new government review aims to tackle the issue to prevent a 'tsunami of pensioner poverty'. It's estimated that a single person will need more than £14,000 for every year of retirement, while a couple will need £22,000 to maintain a minimum level of lifestyle. It sounds a lot, but it is achievable without the need to immediately start stuffing thousands of pounds a month into an account. But how do you get there if you haven't already started saving? Check employer contributions If you're already in work, the first thing you should do is check if your employer pays the minimum three per cent of your salary or higher – some may well offer to match your own contributions, but this might only happen if you opt to pay more. For example, if you're paying in five per cent, your employer could raise their contributions by an additional two per cent, and it won't cost you anything extra or remove anything from your pay packet. Do remember to ask if it means you change pension plan, provider or anything else though, to make sure it suits your needs. Focus on building an emergency savings buffer Next, it's time to get that money in place so you don't need to worry about unexpected bills or costs. Experts say you should ideally have between three and six months' worth of expenses in an easy-access account paying a good level of interest, to cope with things such as the loss of a job, higher-than-expected living expenses or a major outlay for repairs or purchases. Again, if you're just starting out, it's important to forget the eventual size of the pension pot and focus on the first steps. If you are starting with nothing, open a new savings account and start to pay money in weekly or monthly, whichever helps you stay on track best. The consistency of seeing it grow will help you get used to building a savings buffer, and it doesn't matter if that begins with £5, £20 or whatever else you can initially afford. Cut expenses if you need to; one pint of beer fewer a week is about £6-8 (depending where you live), which could add to your savings, and one unused subscription cancelled is a monthly boost of even more than that. Regularity and time will see you hit your goals. And, if you are really in need of a quick boost to your savings, you can consider changing banks. Several will offer over £150 in cash or bring other perks to your account if you switch your current account. Check here for details, and always ensure you choose a bank or building society right for your needs, not just which offers the most immediate funds. Pensions contributions are no different The same process can see you boost your pension pot once you've got a chunk of savings you're happy with – plus, if you're putting money into a personal pension, you'll get tax relief too. For example, if you're a basic rate taxpayer and you put £80 into a pension pot, the government will add £20. Again, it seems small, but do that monthly over a 40-year work career and it's an extra £9,600 being put to work for your future. 'Putting your money away in a pension is a good place to start, rather than a standard savings or investing account. You get the perk of government tax relief on the money and this will significantly boost your pot over time, particularly as you benefit from investment returns on your own money,' said Laura Suter, director of personal finance at AJ Bell. 'The money will be locked up until your pension age, which is currently 57. It means that you can't dip into the cash if you needed it in the short term, so you need to bear that in mind, but it also means that you can't be tempted to dip into it before retirement. Even small contributions each month can add up. Putting away £100 a month, which then gets topped up to £125 a month after tax relief, would be worth almost £52,000 after 20 years, assuming 5 per cent investment growth a year after charges.' What if you earn more but have no pension? Pension concerns are far from limited to those with low earnings. There are plenty of reports, for example, of NHS staff – who would typically get a large employer contribution – opting out of that pension plan to receive a larger immediate salary because the cost of living is so high. If so, trying to take advantage before any possible rule changes might be wise. If you're a higher- or additional-rate taxpayer – with income over £50,270 this tax year – then making use of the extra tax relief can provide a huge boost to your retirement pot. There, instead of the aforementioned 20 per cent relief, you can get 40 or 45 per cent (whichever tax band you are in). The government will contribute at the basic tax rate, as your pension provider will claim it for you, and then you are able to claim the additional amounts by noting your pension contribution when you complete a self-assessment form for the tax year. It has been suggested that such relief may change in future, which makes it important to utilise existing allowances, says Reme Holland, a financial planning partner at accountancy firm Albert Goodman. 'My top advice would be to act now while we know the available allowances and reliefs,' he said. 'For an additional rate taxpayer, you can receive 45 per cent tax relief on your pension contributions, there is the ability to use the last three years of unused allowances via a mechanism known as carry forward. If a flat rate of tax relief is introduced, that could make it far more expensive to fund pension contributions in the future.'
Telegraph
14 hours ago
- Business
- Telegraph
‘Will pension rules block me from withdrawing £50k?'
Write to Pensions Doctor with your pension problem: pensionsdoctor@ Columns are published weekly. Dear Charlene, I've reached age 60, which is the retirement age for my Barclays pension. Part of my pension is in the old Barclays 1964 defined benefit scheme, and this will pay me an income for life. The rest is in the 'Afterwork' scheme that replaced it. The scheme is made up of a credit account and an investment account. My understanding was that Afterwork was a defined contribution scheme, and I would be able to simply transfer this part somewhere else to access drawdown, but I'm confused by the credit account element and what this means. It is referred to as a 'cash balance arrangement'. Does this mean it is also a defined benefit scheme? The reason for asking is that the credit account is worth around £50,000, and I need to know if it comes under the rules requiring independent financial advice. From reading your column, if it counts as a defined benefit, I think I am going to struggle to find anyone to give me the required advice. This risks leaving me with an annuity as my only option, which would drastically alter my plans. I really need access to drawdown to top up my income until I receive my state pension, at which point I will have enough for my needs in retirement. I am hoping I am not going to end up stuck in limbo. Kind regards, Dear Carole, The pension tax rules split pension schemes into categories based on the benefits they can provide. Cash balance pensions are classed as a type of defined contribution scheme. They differ from most other defined contribution schemes because the value of the end pot doesn't just depend on what is paid in (contributions) and investment returns. Instead, there is also usually a guaranteed sum at retirement. This could be a minimum pot value or a guaranteed amount built up each year. While a guarantee might make it sound like a defined benefit scheme – and many resources online incorrectly label cash balance schemes as defined benefit – they are treated as defined contribution or money purchase. Moving to the Barclays Afterwork scheme, the 'credit account' is the guaranteed element. According to my research, this would build up a guaranteed credit of 20pc of your pensionable salary each month if you contributed 3pc of your salary each month towards it. The scheme also applied inflation-linked increases each year to the value of the credit account up to a maximum of 5pc. The money paid into the credit account is managed by Barclays, together with the scheme trustees, to ensure you can benefit from the full guarantee at the scheme retirement age. As you've mentioned, Barclays Afterwork has a normal retirement age of 60, and it is currently closed to new entrants. You could also make additional contributions to the second section of the Afterwork scheme, known as the investment account. You picked how much extra to pay in (as a lump sum or regular contributions), and Barclays would match this up to 3pc of your pensionable salary. If you chose to pay into the investment account, you'd have chosen a fund for the cash to be invested into. This section would move up and down in value, depending only on how your chosen fund performed and how much was paid in. As you are already at the scheme's retirement age, the trustees should have set out your options and what you need to do to access your pension in the way you'd like to. Drawdown can only be paid from cash balance pensions and other money purchase schemes. That doesn't mean a scheme must offer a drawdown, but it is another difference between defined benefit schemes, which cannot offer a drawdown. If your scheme does not offer drawdown, you should be able to transfer the total account (both credit and investment sections) to a scheme that does. You can request confirmation of the transfer value from the Barclays Afterwork trustees. Now that you've reached retirement age, there should not be a difference between the total account value and transfer value. People transferring before reaching the age of 60 should take care, as an adjustment can often be applied to the credit account to reflect early retirement. When you must get advice You must get specialist financial advice to transfer, cash in, or convert a plan that contains 'safeguarded benefits' worth £30,000 or more. This includes converting these funds to provide a flexible income using drawdown. The definition of safeguarded benefits includes defined benefits (like your Barclays 1964 scheme) but also casts a wider net, including other pots with guaranteed minimum pensions and/or guaranteed annuity rates attached to them. The legal definition of safeguarded rights (which can be found in the Pension Schemes Act 2015) appears to specifically exclude cash balance arrangements. While there might not be a legal requirement to get advice, you can still engage a regulated adviser to help you find the best way to bridge your income between now and reaching state pension age. An adviser can help you understand which option is best for your individual circumstances, recommend a provider, and even recommend an investment strategy to help you support your withdrawals, should you decide to move forward with drawdown. There is plenty to double-check with the trustees of the Barclays Afterwork scheme here, but I'm really hopeful that you will not be left in limbo as you initially feared. With best wishes, - Charlene Charlene Young is a pensions and savings expert at online investment platform AJ Bell. Her columns should not be taken as advice or as a personal recommendation, but as a starting point for readers to undertake their own further research.
The Independent
a day ago
- Business
- The Independent
Why state pension age could rise again
Liz Kendall, the Work and Pensions Secretary, has launched a new pension commission and announced a review of the state pension age, warning of a "tsunami of pensioner poverty" without major reform. The review opens the door for an increase in the state pension age, currently 66 and set to rise to 67 by 2028 and 68 by 2046, with economic think tanks suggesting an acceleration is likely. Research indicates that future retirees in 2050 are projected to receive £800 less per year than current pensioners, with 2 million already in poverty and numbers expected to rise. Kendall highlighted that almost half of the working-age population is not saving for retirement, exacerbated by high housing costs, and noted a significant gender gap in private pension wealth. The new commission will provide recommendations by 2027 on boosting retirement income, though it will not examine the triple lock, which costs £31bn annually, or the state pension age review.
The Sun
a day ago
- Business
- The Sun
Blow to Brit workers as future OAPs face working for longer for a SMALLER state pension
Ryan Sabey, Deputy Political Editor Published: Invalid Date, MILLIONS could be forced to work for longer after minister Liz Kendall announced another review of the state pension age. It is already poised to rise to 67 by 2028 — but experts say it will have to hit 74 within decades if the triple-lock is kept. Welfare Secretary Liz Kendall appeared to pave the way for the state pension age to rise ahead of schedule by launching a review to make sure the system is sustainable. 2 2 She also warned the cost-of-living crisis is stopping people from saving in private pension pots. Ms Kendall said: 'Unless we act, tomorrow's pensioners will be poorer than today's.' Her review, due in 2027, comes after the Office for Budget Responsibility said the triple-lock — which guarantees a state pension rise of at least 2.5 per cent each year — is costing three times more than originally forecast. Ms Kendall said the triple-lock is 'out of scope' for her report. The state pension age will soon rise to 67. The next increase to 68 is due in the mid-2040s, but the Institute of Fiscal Studies says it will have to be increased to 69 by 2049 and then reach 74 by 2069 if the triple lock is kept. Without rises, state pensions could exceed six per cent of GDP. Tory leader Kemi Badenoch blamed Labour for less growth and more unemployment, meaning 'less money to pay' for pensions. An estimated 15 million adults are under-saving for retirement. How to track down lost pensions worth £1,000s How will a higher state pension age affect my retirement? By James Flanders, Chief Consumer Reporter: Raising the state pension age means people will have to wait longer to get their government-funded pension, which can be tough for those who rely on it as their main source of income. It's especially challenging for people in physically demanding jobs or those with little in the way of savings, as they'll need to figure out how to cover the gap between stopping work and qualifying for the state pension. But the good news is that private pensions give you more choice. Right now, you can access private pensions from age 55, although this will increase to 57 in April 2028. If you've been saving into a workplace pension or a personal pension, you could retire earlier than the state pension age, depending on how much you've saved. You can take the money as a lump sum, set up regular payments, or even leave it invested to grow. For those with enough savings, this flexibility means you can plan retirement around what works for you. But if your private pension isn't enough, you might find yourself working longer and waiting for the state pension to kick in. It's a reminder of why starting to save early and keeping an eye on your pension pot is so important for creating options later in life.
