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How Pensioners Can Get A Guaranteed Return Of 12pc

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http://www.telegraph.co.uk/finance/persona...rn-of-12pc.html

Experts say investing in a pension could be the solution for anyone over 50 who wants to beat the deposit account famine.

Around 40pc of accounts are paying interest rates of 1pc or less, according to MoneyExpert.com.

But many older savers can get a guaranteed return of between 8 and 12pc a year by buying an annuity by paying into a pension that allows you to draw benefits immediately, known as an immediate vesting pension.

Even people who have retired or are not working are allowed to pay £2,880 into an immediate vesting pension provided they are between the ages of 50 and 75.

Working people are entitled to pay in an amount equal to their annual taxable earnings, subject to a maximum of £235,000.

“For pensioners with cash in the building society who have been used to getting 5pc a year income, immediately vesting pensions could be a welcome lifeline,” says Nigel Callaghan, pensions analyst at Hargreaves Lansdown.

The eye-catching rate of return comes from the combination of tax relief from the government, tax free cash paid back out of the pension and the income from the annuity. Even people who are not working can get tax relief totalling £720 on contributions up to £2,880 each year.

The older you are, the higher rate of return you will get, which is not surprising given the fact that you will probably benefit from the plan for a shorter period before you die.

For example, a 75-year old male who pays £2,880 into an immediate vesting pension, will see £720 added to the sum by the government, making a total pension pot of £3,600. The pension is then drawn immediately at which point he is entitled to £900 back straight away as his tax-free cash lump sum. An annuity is then bought with the remaining £2,700, paying £218.30 a year.

Too good to be true?

Another clever ruse to get us to part with our cash?

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Gotta live till he is almost 90 to get his money back....and dont forget at 75 he will be getting one of the best annuity rates....lower the age and that 281 a year will drop like a stone to about 30 quid a year...

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http://www.telegraph.co.uk/finance/persona...rn-of-12pc.html

Too good to be true?

Another clever ruse to get us to part with our cash?

This looks like it could be good for people who want to live on the interest from their savings, not good if you want to suddenly access a lump sum (housing repairs, gift to children, etc).

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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