Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • September 2014
09

People with small pension pots 'need financial advice too'

Open-access content Wednesday 10th September 2014

MGM Advantage has urged the retirement industry to stop writing off small pension pots as undeserving of attention, saying it would be a ‘disaster’ if it were to alienate people by not considering their needs as equal to wealthier individuals.

The retirement income specialist said it wanted the industry to collectively show its concern about getting the best outcomes for people with comparatively small amounts of savings as it is with the wealthy.

According to Association of British Insurers' figures cited by MGM, the average annuity last year was bought with a pension pot of £35,600, suggesting that many UK savers would generally be categorised as having a small pot.

Andrew Tully, MGM Advantage pensions technical director, said: 'As part of the financial guidance for all advocated at the Budget, we as an industry need to be acutely aware that more people, many of them with smaller amounts of saving, will look to advisers and providers for help.

'It would be a disaster for this new pension's environment if we were to alienate these people by not considering their needs as equal to those who have greater wealth.'

He said that people who had saved all their life 'wanted to be assured' that the industry was going to work as hard as it could to get the best possible retirement income, regardless of their pension pot size.

'Commentators - and I include myself in this - often give the impression that those people with smaller pots will only have one solution under the new flexible regime,' Tully added.

'That they should take all their money out as lump sum without considering any other solutions. I think this does them and us, the industry, a disservice.'

He stated that although it may be right to take a lump sum, many of these people with smaller pots might have other assets and needs, and require a broader consideration of finances. For instance, people might have health issues that qualify them for better incomes through enhance annuities, and so have the potential to generate a reasonable level of sustainable lifetime income.

'Pension pots might seem small to those working in the industry but for people that own them they are often significant and crucial to retirement plans,' he said.

This article appeared in our September 2014 issue of The Actuary.
Click here to view this issue
Filed in:
09
Topics:
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Motor Pricing Manager

London, England
£60000 - £80000 per annum
Reference
120910

Mixed Reserving & Capital Role

London, England
£80000 - £100000 per annum
Reference
120909

Risk Management Actuary (Capital Modelling)

England, London
£70000 - £90000 per annum
Reference
120908
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2021 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200