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Cash creation hits annuities

An elderly couple on a bench by the beach
BBC Radio 4's Money Box

Saturday, 14 March 2009

at 1204 GMT

On Radio 4 and Online

People due to buy an annuity shortly will see them drop in value after the injection of £75bn into the economy by the Bank of England.

Insurance companies pay out annuities - a regular income from a retiree's pension pot - based on the yields made from government bonds or gilts.

These yields have dipped dramatically after the Bank announced its operation to begin quantitative easing - creating £75bn to buy these gilts.

Rash Bhabra from actuaries Watson Wyatt explains why the injection of money into the economy will impact on annuities and we speak to Stuart Bayliss of Annuity Direct.

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Money
Some banks are demanding 100% personal guarantees from borrowers

Small business loans

With estimates that as many as 120 small businesses a day are now going under, the government has been desperately trying to persuade banks to lend money to firms that are viable.

In January it launched a £1.3bn lending scheme which would offer banks a tax payer guarantee for 75% of the value of certain loans if a firm defaulted.

But many small businesses are unaware the scheme exists, and of those that are, there are complaints it is not delivering what it promised.

Bob Howard reports and Paul Lewis speaks to Steve Cooper, managing director of Local Business Banking for Barclays and Shriti Vadera, Minister for Economic Competitiveness and Small Business.

Related stories / further information:




Woman talking on a mobile phone
Have you been offered cheap insurance for your phone?

Mobile phone "scam"

Trading Standards in Swansea is investigating several companies over sales of mobile phone insurance.

Many people who buy a new phone are being called within hours and offered a cheaper deal than the one they bought with the phone.

But in some cases money has been taken from their account without any adequate cover being provided. Samantha Washington reports.

Related stories / further information:


Elderly ladies on a park bench
Women often have contribution gaps after caring for dependants

State pension

People with gaps in their National Insurance contributions record between 1996/97 to 2001/02 have just three weeks to act if they want to boost the value of their state pension.

Voluntary or Class 3 National Insurance contributions can usually be paid for any of the previous six years, but because deficiency notices for the years 1996/97 to 2001/02 were not sent until 2004 or 2005, time limits were extended.

But not everyone can or should make up the shortfall.

We discuss the options with Malcolm McLean, chief executive of The Pensions Advisory Service.

Related stories / further information:


BBC Radio 4's Money Box was broadcast on Saturday, 14 March 2009 at 1204 GMT.

The programme was repeated on Sunday 15 March 2009 at 2102 GMT.



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13 Mar 09 |  Moneybox


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