UK Pension Crisis
Millions of people are facing an uncertain future due to pension companies consistently cutting the rates offered on their guaranteed annuity.
In addition, male pensioners will suffer an extra blow with the introduction of the EU’s new ‘gender directive’, which will further force down annuities for men. An annuity is the guaranteed income for life bought with a pension pot on retirement.
Twenty years ago, a £100,000 pension fund would have guaranteed an income of £15,640 a year for life for a 65 year-old man. Now that figure is just £5,140 a year.
And the crisis decimating pensions is set to continue for months, perhaps even years, piling on the agony for the newly-retired. In fact, experts warn that the situation is likely to worsen as annuity providers struggle with volatility in the stock market and the Bank of England’s quantitative easing (QE) strategy to tackle the recession.
The money-printing policy has been attacked for triggering a ‘death spiral’ in pensions, which has, some experts say, led to the worst retirement payouts in history.
Annuity rates have been in decline for 20 years. This is mainly because people are living longer, meaning insurers have had to guard against paying out over an increasing number of years. However the financial crisis and quantitative easing, which have caused interest rates and gilt yields to fall, have accelerated this decline.
The deficit in UK pension schemes has now hit £312 billion, the highest deficit since Pension Protection Fund records began. It is, therefore, little wonder that so many people are choosing to shift the security of their future over to quality land investments, such as those found in the Cayman Islands.
Land investments have increasingly been used to help shore up people’s retirement, ever since real estate was allowed as an investment vehicle within the SIPPs wrapper. Certain types of land investments offer far more safety than the speculation used by many pension fund managers.
For instance, land investments in the Cayman Islands benefit from the fact that the islands operate under British Common Law and have a land registry, which was created by a UK-government sponsored initiative to remove any doubts over land ownership.
