Partnership Share Discussion Threads

[loverat] 24/3/2014 15:15

Thanks WJ, I understand. I am reading up on all this stuff as I hope to be in a similar position to you when I'm 55. In a way, I think they make too big a deal about people getting tax relief. It is just a portion of your earnings which you have not been taxed on - rather than you have been given the money.

[w1ndjammer] 24/3/2014 15:03

Loverat

yes got the 40% tax relief, but I don't wan`t to give it back!

I will have no other income so the first 10.5k will be tax free then 20% on the rest of the annuity income.

WJ.

[loverat] 24/3/2014 14:56

W1NDJAMMER

I assume you have been a 40% tax payer and hence had the same rate tax relief.

As for what you say, I think annuities will still continue and insurers will probably bring in new products. I think alot of people will perhaps do a mixture of things - draw some money and put some in an annuity. By the way, if you buy an annuity won't you get taxed 40% on the 300k anyway when it is paid?

[w1ndjammer] 24/3/2014 14:41

to cash in or stick, that's the question. In 3 years I will be 55 with at least a £400k pension pot to cash in. so I will take my £100k tax free that leaves £300k do I want to lose 40% of that by cashing the lot in, or will I still buy an annuity ? hmmm.

WJ.

[scrapheap] 24/3/2014 14:12

I'm no fan of HL but if you look through I and others are posting the views of people in the industry (which as an IFA I count myself) in saying that enhanced annuities, fixed term annuities, equity release, long term care annuities have a future which is not at bleak as the market seems to think.

Life cos don't dual price but that's not the point - if you don't use the OMO which far too many people fail to use (hence the FCA investigation going on) then too many go with their existing life company many of which are not active players in the annuity market but they still offer an annuity anyway.

[scrapheap] 24/3/2014 13:49

absolutely. I'm buying PA and JRG as I think the market is wrong. We shall see.

now that is perhaps brave & courageous in Yes Minister speak.

[123ct] 24/3/2014 13:39

neither brave or courageous but factual, this board is for discussing Partnership plc so I will not add any further as would not be relevant to this BB, and my view does not need to be correct, it is all about opinion

[scrapheap] 24/3/2014 13:21

Brave and courageous statement....

"You do not need advice for flexible drawdown, just a bit of common sense and time and patience to think it through, there is enough information online to make a decision here, indeed apart from tax advice no one really needs any financial advice from advisers these days"

[scrapheap] 24/3/2014 13:19

Tom McPhail (pictured), head of pension research at Hargreaves Lansdown, believes the market will survive but in a leaner and more competitive form.

'A lot of people will still buy annuities, but insurance companies will have to work harder to get people buying,' he said. 'The change in the rules should stimulate market competition.

'I think markets overreacted. There is no doubt the annuity market will shrink, but enhanced providers like MGM Advantage, Just Retirement and Partnership will remain competitive.

'It's the exploitative life companies that sell annuities to their own back books that will be hurt,' said McPhail.

[sg1972] 24/3/2014 12:10

Share price suggest this will go under?

[scrapheap] 24/3/2014 11:37

More comment showing annuities are not dead...

hxxp://www.moneymarketing.co.uk/2008317.article?cmpid=pmalert_187503

[callumross] 24/3/2014 10:41

Well, watching last few days to let the dust settle but that's me in for an initial 4000 shares as looking way oversold. Tucked away in bottom drawer for a few months, I guess, until the situation becomes clearer. Market pricing in armageddon here, I think!

[actybod] 24/3/2014 09:13

Once the MI comes out showing how many annuities were cancelled in the next month we will see a snapshot if effect. People want to control their own money and won't resist being able to take lump sum IMO

[scrapheap] 24/3/2014 09:01

would imagine some institutions will be wanting to reduce their holdings prior to Q1 end to avoid PA. or JRG showing up in their top 10 holding etc - window dressing in reverse...just a guess and call me a cynic.

[oldtown] 24/3/2014 08:20

The apparent failure to bounce, despite numerous attempts and the constant sell orders attacking would suggest some large sell orders still being worked.

[chairman20] 23/3/2014 23:18

The dirty secret in the annuity/pensions business
was/is that many many pensions that vest have
unfeasibly small capital values. Big pots and
lifetime caps are fewer than 5% of the market.

another little understood secret is that annuities
are very important for life insurers. Life assurance
is a bet that policyholders will not die early
and annuities are a bet that they will die quicker
than expected and not be Vulcans (live long and
prosper when the insurer looses money.

So insurers may promise the politicos some
major cosmetic changes (capital preservation, lower
commissions and costs) in order to keep this
balancing act going (A life portfolio balances and annuity
portfolio and vice versa)

But selling annuities - advice and brokers like PA - will
be sacrificed as the vultures that they are. The profit
take is totally unjustified if - like an insider - you know
the ey-watering commissions paid on anything that is not
bought by a professional (that means an actuary).

There will still be a great market for very high NW bespoke
annuities for tax planning and other purposes - but the
actuarial firms (and the HNW merchant banks) are the ones
best placed to pick it up. They can design and write the
product and underwriters just see it as another investment
like gilts.

[sh0wme] 23/3/2014 23:01

Investor Chronicles view on P.A. Share price. Quote:- " Despite the Chancellors move, the market annuities isn't going to disappear - leaving Partnerships share price slide looking like a significant over-reaction. The shares now trade well below June's 385p floatation price and almost at embedded value. That's unsustainably cheap. Buy".

[scrapheap] 23/3/2014 20:27

Agree entirely with the Mark Wood article though would add it's not just those who have critical illnesses who buy the enhanced annuities, not by any stretch. The PA advert is pointing out that their market is going to expand if more people are going to shop around than has been the case historically (too many going with their pension provider and being ripped off, not using the OMO) so their share of a diminished overall market may well still be higher in £ terms too..

I'm convinced this is an over reaction on JRG and PA. of truly epic proportions and have invested personally accordingly... we shall see if I'm right in the months ahead!

[django 2012] 23/3/2014 16:28

link to the above :

[sh0wme] 23/3/2014 16:24

Copied from a post on lse

By Mark Wood9:30PM GMT 22 Mar 20141 Comment One might think, judging by the stock market's reaction to this week's Budget speech, that the UK's £12bn individual annuity market is set to collapse. In my mind, however, this is something of an overreaction and the insurance market will continue to adapt to the changing demands of the market as it has done so often before. The specialists in the annuity market, Just Retirement and Partnership, have taken this approach a step further by offering higher pensions to those suffering from critical illnesses. These companies are innovators. They serve a particular part of the market that has grown rapidly. Their products will continue to be in demand. Additionally, the life insurers are shifting their attention from the individual annuity market to providing bulk annuities to those large companies that have the funds and are eager to transfer the liabilities of final salary pension schemes off their balance sheet. Last year £5.6bn of bulk annuities were written in the UK. This year the market is set to be between £12bn and £15bn. The growth in this market will more than make up for the predicted loss of revenue from a shrinking individual annuities market; and of course the individual annuity market is unlikely to disappear. About 700,000 individuals retire every year. The number of annuities taken out in the open market last year was little more than 100,000. Those buying annuities today are almost certainly buying them because they need to. They would otherwise struggle to meet their living expenses. The number of people purchasing annuities will grow once interest rates start to rise. The history of financial markets tells us that as the rules change, products adapt. People will continue to seek certainty that, in their old age, they will have sufficient income. The management of a portfolio of investments requires a sophisticated knowledge of markets and a good deal of investment skill. Not many individuals have the requisite knowledge or expertise, let alone the confidence, to run the risk of getting things wrong. Even if an individual plays the markets well, life expectancy is accelerating at an unprecedented rate. An annuity insures an individual against outliving their assets. Expect to see the price of insurers come back over the days to come.

[sh0wme] 23/3/2014 16:22

Techno, thanks

[techno20] 23/3/2014 15:31

Showme,

Headline is "Annuities. What took you so long, George?

Overall message is around encouraging shopping around.

Final para reads..."When you've got the best solution, you welcome competition. And that's what the budget change means. Thanks, George"

Along with this is a positive piece from Mark Wood. Final para reads...."Even if an individual plays the markets well, life expectancy is accelerating at an unprecedented rate. An annuity assures an individual against outliving their assets. Expect to see the price of insurers come back over the days to come"

Should be a lively week ahead.

Techno