Retiring workers are being “ripped off” by financial companies making huge profit margins on annuities, campaigners have warned

Pensioners being ‘ripped off’ by profit margins on annuities

Retiring workers are being “ripped off” by financial companies making huge profit margins on annuities, campaigners have warned.

Experts warn that the industry is concealing large profits. Photo: PA

By Richard Evans, and James Kirkup

9:47PM GMT 08 Mar 2013

A Telegraph investigation has raised concerns about the profits that insurance companies and other firms are making on annuities. Only one annuities provider, Standard Life, has disclosed its margins on annuities, revealing that it pockets almost 20p of every pound a customer pays for an annuity. Other firms refuse to reveal their margins, and experts warn that the industry is concealing large profits. Ros Altmann, a pensions campaigner, said: “These huge margins are outrageous.” Annuities rates have tumbled in recent years as the Bank of England’s quantitative easing programme pushes down returns on the government bonds that are the basis of annuity income. Financial experts say that people can significantly boost their retirement income by shopping around. Steve Webb, the pensions minister, said: “Annuities are increasingly important. More openness on rates should help consumers get a better deal.” Standard Life pays an income of £4,990 on a £100,000 annuity for a 65-year-old. The market leader, Aviva, pays £5,600.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: