Standard Life, the savings and investment specialist, has warned that the effects of inflation can seriously damage one's retirement wealth. New data released today shows that a 90-year-old who retired in 1981, when petrol cost 35p a litre, would have seen the purchasing power of a £10,000-a-year level pension income fall to just £3,207 today.
John Lawson, Head of Pensions Policy at Standard Life said: "Inflation can have a huge impact on the purchasing power of your retirement income. As people are living longer, retirement income needs to go that much further, with a 60-year-old man retiring today living on average for another 26 years."
He went on to say: "Our research shows 57% of people do recognise that an income keeping pace with inflation is attractive. But currently, and somewhat inevitably, the majority go for the higher starting income of a level annuity, leaving only 3% choosing an inflation linked annuity. This is perhaps understandable given that annuity rates have reached record lows and level annuities start at a higher rate than their inflation linked alternatives.
"People approaching retirement need to consider their own personal inflation rate may be higher in the future than that of the average person in the UK due to the types of products and services they will consume. After 10 years in retirement, a 60-year-old man who had purchased a RPI linked annuity with a fund of £100,000 could achieve a higher annual income than someone who had purchased a level annuity."
An example provided by the data shows the purchasing power in today's money of a £100,000 pension fund being used by a 60-year-old man retiring in October 2011 to purchase a level or RPI-linked annuity. Various rates of inflation are shown over a 30-year period. If inflation averaged 7% over a ten-year period, the then 70-year old man would begin to receive a higher annual retirement income than if he had purchased a level annuity.
Please note in this example the level annuity receives a higher starting income than the RPI-linked version. At year 10, with inflation at 7%, there is a crossover when the RPI-linked annuity annual income exceeds the level annuity annual income. At year 22, the total payments from the RPI-linked annuity exceed the total payments from the level annuity.
Lawson concluded: "Low inflation has persisted for the last 15 years or so, but there is no guarantee that it will continue. Rising world demand for food and fuel, without a similar increase in supply, has seen prices for the basics rocket. People retiring today need to consider that they will still need to pay for food, fuel and other essentials for a long time into the future and that these basic items are likely to cost a lot more in 10 year’s time than they do today.
"There are many options to consider at retirement which could minimise the impact of inflation on your income, so seeking financial advice is vital."
FACTFILE:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides life assurance, annuities, life insurance, savings products, investment bonds, tax efficiencies, pension products such as a self-invested personal pension, financial education and investment management to around 6 million customers worldwide.
Standard Life has its headquarters in Edinburgh and employs around 9,000 people across the UK, Canada, Ireland, Germany, Austria, India, USA, Hong Kong and mainland China. At the end of June 2011 the Group had total assets under administration of £200bn.
Sunday, 30 October 2011
That's Christmas: Create your own Winter Wonderland!
That's Christmas: Create your own Winter Wonderland!: The pre-Christmas build-up can be a magical time for adults alike. And now you can make it even more special for you and your children with ...
That's Christmas: Create your own Winter Wonderland!
That's Christmas: Create your own Winter Wonderland!: The pre-Christmas build-up can be a magical time for adults alike. And now you can make it even more special for you and your children with ...
That's Christmas: Don’t be left in the cold this Christmas!- Get rea...
That's Christmas: Don’t be left in the cold this Christmas!- Get rea...: • Initiative follows problems caused by freezing temperatures last winter • Record property insurance claims • Government departments, L...
Thursday, 27 October 2011
Furniture Village Launches Single Multimedia Bed
Perfect for the discerning teenager, the stylish Harvard incorporates two round speakers within the headboard and a hidden 24” LCD remote control TV that rises with a simple touch of a button. And when it's not in-use, it can be easily retracted into the foot-end, creating a flush surface and erasing all signs of a TV.
Also offering an integrated MP3 docking station, this multimedia bed really is a one-stop entertainment centre. And in addition to all the tech mod-cons, it has handy 'cubby holes' for storing plenty of CDs and DVDs.
But if the family develops a spot of green envy, there are plenty of other adult multimedia beds in Furniture Village's new TV Bed.
Visit www.furniturevillage.co.uk or one of the 39 stores nationwide to view the collection.
Sunday, 23 October 2011
Log fires. For Christmas and beyond
Carefully placed mistletoe and oversized stockings surrounding a roaring fireplace is a quintessential Christmas image. However, given that open fires are notoriously poor heat emitters (typically producing efficiencies of just 10-15%) it is understandable that homeowners prefer to reach for the central heating controls rather than chopping another pile of logs. With this in mind, AGA Stoves, part of the AGA Rangemaster Group, has produced a handy guide to outline the benefits of choosing a wood burning stove and explain why they are not just for the festive season – they can last a lifetime.
The guide provides homeowners with all the information they need to make an informed decision when purchasing a wood burning stove. From running costs to maintenance, manufacturing quality to expected lifespan, the AGA Stoves log burning guide is a must read with winter just around the corner.
AGA Stoves manufactures a wide range of wood burning stoves which are perfect for a variety of homes. Notable models in the range include the Little Wenlock Classic and the Minsterley. The Little Wenlock Classic is a compact stove (H 533mm x W 400mm x D 415mm) which has been designed for smaller homes and standard fireplaces.
By using a combination of high quality engineering and intelligent design, it is exceptionally efficient (over 81%) and is supplied with a supplementary wood grate, providing the option of burning wood or mineral fuels. To not exclude city and town dwellers, AGA Stoves has also developed a smoke exempt version which can be used in smoke control zones – the Little Wenlock Classic SE.
The Minsterley boiler stove is designed to provide plentiful heating and hot water for a family home and is capable of running up to 8 radiators. Thanks to its interchangeable fuel plate, it can also be used with either wood or solid fuel, and has a minimum rated heat output of 3.6kW with a hot water output of 7.5kW. The Minsterely retails at £1,825.
The full guide is available as a downloadable PDF at: www.agaliving.com/media/stoves/AGA_Stoves_Christmas_21.10.11...
Thursday, 20 October 2011
3G living with SANIFLO?
A growing trend in the UK, especially amongst younger buyers or those who can’t afford the property they’d like on their own, is to get together with older generations of their family and buy a home together.Likewise high property prices, the cost of childcare and insufficient places in care homes to accommodate an ageing population can make it both emotionally and economically sensible to invite the grandparents to move in.
3G or three generation, living does work well for some families. Whether buying a big home to live in together, or opting for a property with annexe potential. The annexe option is a good choice for those that don’t want to be on top of each other the entire time, as it gives a degree of privacy and space.
So if there is sufficient space to turn a ground floor room or a garage into living space it’s simple using Saniflo units to install ensuite bath/shower, WC facilities and kitchen facilities even where the soil pipe or drain is remote and gravity drainage is a problem.
Using Saniflo products means that independent living can be achieved without breaking the bank or digging up the floor. Whether it’s for a granny flat or for separate accommodation for ‘first-homers’ who haven’t yet saved up the deposit for a starter flat or house, Saniflo have a product that will enable the installation of extra facilities. It all depends on the facilities you want to add; Saniflo make a wide range of products each designed for adding different facilities:
Saniflo: The original macerator pump for an extra WC almost anywhere
Sanitop: A macerator that enables you to install a WC and wash basin – ideal for cloakrooms
Sanislim: A macerator pump specifically designed for use with slimline sanitaryware
Sanipro: A macerator that enables you to install a WC and shower
Sanicompact: A unique cisternless space-saving ceramic WC with a built-in macerator pump
Sanipack: A macerator pump specifically designed for use with built-in bathroom units
Sanishower: A pump for shower and washbasin
Saniplus: Largest of the Saniflo domestic range, a macerator pump that enables you to install a bathroom or en-suite with ease
Sanivite: A domestic pump for discharge of waste water from kitchen and utility rooms
Saniflo…helping you keep your family together.
For further information:
email: sales@saniflo.co.uk
www.saniflo.co.uk
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