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Monday, 2 March 2009

In the shoes of income seekers

Having just spent a weekend looking at income options with my retired Mum who hasn’t a pension to fall back on – I have realised that the search for income when you are in your 70s is very stressful indeed. Firstly if, like my Mum, you don’t have a pc you have to go round to different banks and building societies by foot – and then be ‘sold to’ at each visit. You are probably not being given the best or latest deals either – so you really are e-excluded.

You are often given contradictory information – one person told her that annuity rates were the best they have been for ages – yet in the papers there has been wide coverage about how annuity rates are low.

She was told that although interest rates were the lowest they had been well since records began, that she should guard savings against inflation coming back in 3 years.

She doesn’t understand that some advisers are qualified to tell her about some products and not all (such as Lifetime Mortgages).

She was also told about a capital guaranteed product linked to the FTSE 100 available from a building society – but then told that if the asset manager who was offering it went under, she would loose any money over the £50,000 compensation amount. So it feels like no guarantee at all from where she is sitting.

And when you are in your mid 70s you want security. You don’t want to have to review your money every 6 months and trek around finding the best deal (she thinks she can’t afford an IFA by the way). In fact she feels that when things should be getting simpler and easier, her financial situation and the options available to her have never been more complex. And she is right. It is a minefield and I can tell you I am not looking forward to having to do this when I am retired - and I know a thing or two about this stuff!

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