You pay your premiums for the level of cover you require for the term you require and if you do not die within the term the policy finishes and the insurance company wins.

Decreasing term assurance is most commonly used where a liability is protected and which reduces, for example a repayment mortgage. Protecting a mortgage debt against is a relatively simple calculation, because you would normally only cover yourself for the amount that is owed.  If you want to protect your family’s standard of living in case you die prematurely, the calculation can be more scientific.

A starting point to make the calculation is how much income would be required to maintain the family’s life should you die.  If for example, this equates to £10,000 per annum, for 20 years, you could either protect for £200,000 (20x £10,000) to guarantee the income. The other option is for you to take a risk on investment returns and lifespan and insure for a lower amount.  Once you have decided on how much income to protect, you then need to protect any capital requirements that you potentially have, for instance children’s higher education costs.  You need to think, would they be able to afford higher education if you were not around?

Insurance is important, but the cost of potentially providing for the future has to be balanced against living today.  Whenever doing some financial planning and deciding upon the correct level and most appropriate type of protection, it is sensible to seek independent financial advice and The Money Map are experts in all fields of protection for the family.

The post What is the most cost effective life protection for my family? appeared first on The Money Map.

A couple of the options are to receive the income monthly, annually, in arrears or in advance.

This decision will depend on your own individual circumstances; most people have monthly commitments with household bills, school fees for grandchildren and holiday planning funds to manage. Annual pension payments may only suit if you have additional income from other sources, for example, other pensions either personal or company, or from your spouse.

The benefits of receiving the income annually in arrears is that you may receive slightly more income than choosing monthly. The main disadvantages are that once you have made a decision, the annuity shape cannot be changed.

A review of your circumstances with an independent financial advisor can help to identify these issues and make sure the decisions you make will suit you now, and in the future.

The post With an Annuity, is it better to have the income monthly or annually appeared first on The Money Map.

Due to life expectancy averages, life companies have historically priced their pension annuity rates on the fact that an average man’s age at death is lower than that of a woman’s and therefore they have received a higher pension income than a woman of the same age.

It is expected that men’s annuity rates could fall by as much as 20% because of this ruling, and for those that are due to retire shortly this is yet another blow to their pension income which compounds the issue of annuity rates that are already low.  Unfortunately the EU cannot guarantee that men’s life expectancy will increase to the same as women’s which may have made this ruling more palatable.

For those that do not want their pension income now it is worth doing some in-depth retirement planning now. It is possible to buy a pension annuity and defer the income by up to 1 year; an income will then be received as an annual payment once per annum.  It would also still be possible to take a tax-free lump sum now and it would benefit from receiving a pension rate based on current legislation.

It would be wise for men that are due to retire in the next few months to consider the option of retiring slightly earlier in order to retain the current rates, however, if retirement is not due for several years early retirement is unlikely to be beneficial.

The post Should Men Need to Act Now on Flexible Annuities? appeared first on The Money Map.

This is due to many factors including; poor investment returns, lower rate annuities, an increase in the cost of living, and low interest rates. As a result many are electing to remain working beyond retirement.

It has been suggested that as many as four in ten will work at least part-time in retirement to supplement their pension income.

Whilst this may be achievable for many shortly after retirement, the danger is that the income shortfall will not go away and at some point in the future part-time work will not be achievable. 

Future generations should take note of this statistic and act now at a younger age to ensure that they will have sufficient income at retirement age.  Putting a percentage of your income to one side through pension, savings or ideally both will give a much greater chance of a happy and relaxing retirement.

The government’s new auto enrolling pensions for all employees will at least ensure that everyone has a private pension, but it is up to the individual to ensure they will have enough for their needs at their desired retirement age.  Working beyond retirement to supplement a pension is only a temporary solution, it is not a long-term fix for underfunded pensioners and this issue can only be rectified if it is identified at a younger age and acted upon.

The Financial Advisers at The Money Map offer pre retirement counselling aimed at working out how much of your salary you should put to one side in order to meet your retirement goals.  It is vitally important that you know how much you are due at retirement; it should not come as a shock when it is too late.

The post Why Four-in-10 Over-55s Will Work Part-Time in Retirement appeared first on The Money Map.

In days gone by, people who were retirement planning had built up pension funds and only had the option of using their pension provider for an annuity, and they got what they were given. Since the introduction of the Open Market Option in 1975 and other developments such as Income Draw-down in 1995, pensioners have begun to have more flexibility.  However, the increased level of options has also increased the requirement to seek advice.

There is no such thing as a straight forward annuities purchasing. When retirees have decided that an annuity is the most appropriate one for them, they then need to decide the benefits that they want attaching to their retirement income.  This is even before they decide whether a conventional annuity or an investment annuity is the way to go.

The options that can be included on a “basic” annuity can include a level or increasing annuity. Before purchasing an annuity you will need to ask yourself a lot of questions.

 If an annually increasing income is required, how much should it increase by? 

Would you want a set annual increase, would you want an increase by the Retail Price Index (RPI) or would you rather it increased by the Consumer Price Index (CPI)?

Would you want your spouse to benefit from the pension if you predecease them?

Would you want them to have the same level of pension, 2/3rds or half of what you were receiving?

Do you want to build in any guarantees of pension payment, so that the pension does not die with you? 

How long would you like the guarantee to last, 5 years, 10 years? 

Would you like you income paying in advance or are you comfortable receiving the income in arrears?

What impact with any of these options, will there be on the amount of income you receive?

If you know the answers to all the above, you can quite easily purchase your annuity, on your own.  Then, out of the 20 or so annuity providers, you’ll need to assess who is currently offering the best annuity rate.

Pension and Annuity Advice is very important, the Pensions market is evolving all the time and you need to make sure it’s up to date and relevant to you. Everyone is different and at The Money Map we strive to help you find the option that works for you.

The post How to avoid out of date annuity advice appeared first on The Money Map.

My Readers receive up to date information and access to advice which I’m sure provides a great deal of assistance in understanding the issues surrounding financial advice.

We have always found The Money Map to be a great source of information and the service you provide is always of the highest standard.

It has been a pleasure working with you and I look forward to maintain the relationship we have built to date.

Tricia Phillips

Finance Editor

Daily Mirror

The post appeared first on The Money Map.

Mrs Winn (Tyne and Wear)

The post appeared first on The Money Map.

Mr Sydney Hughff (Teeside)

The post appeared first on The Money Map.

Mrs M. McAlroy (Harrogate)

The post appeared first on The Money Map.

Not only did The Money Map obtain an annuity 27% more than my original pension provider, but also provided a 10 year guarantee, which of course gave me peace of mind. The whole operation went very efficiently and smoothly, thanks to Mark, even avoiding the latest stock market crash.

Thank you Money Map.

Regards

Michael

The post appeared first on The Money Map.