Monday, February 13, 2012
Government to become annuity provider.
Suggestion that the government enter the annuity market because of market place failure, which is reflected in the high fees and low annuity rates provided to private pensioners. So firstly the obvious answer would be to address the lack of competition and aside from that one of the reasons for poor returns (aside from undoubted excess fees) is the artificially low returns on the gilts that the pension funds are forced to buy! Also as we know these government schemes are always unfunded. So you could view this that the government is becoming so desperate for cash that they propose to receive in entirety the life savings of the private sector population, which they will have spent by the next day, and then fund these ongoing commitments from additional entrants... sheesh.