According to the Prudential retired people have substantial assets and savings although they are not maximising them to aid their standard of living.
On average retired couples have almost GBP270,000 in assets and savings whilst single pensioners have half this amount. However, even though they have these large funds at their disposal, less than 20 percent of them have sought professional financial advice. A Prudential representative was amazed at these findings, feeling that pensioners were missing out on perhaps thousand of pounds extra by better using their money.
Even ignoring the value that people have in their homes a retired couple still has around GBP135,000 in accessible funds. This money should be made to work harder said the man from the Prudential and deliver a better standard of living.
The Prudential is heading back to the pensions buy out environment with a deal worth around GBP350 million to pick up some of the Rank pension scheme.
The deal is expected to be confirmed next week when the interim results of the Prudential will be announced. Under the terms of the agreement the Prudential will take on the duty of paying the pensions of existing recipients of pensions through Rank.
There are around 10,000 people currently on the books,all of whom will in future receive their pension payments from the Prudential. This is a market that they used to be strong in but moved away from a couple of years ago to focus on their core business.
The Prudential has advised with profits policyholders that there will not be a windfall payment to them of surplus funds after considering the option fully.
There was a consideration of the option, working out at around GBP1,000 per person which would have been in exchange for these customers giving up the right to any future pay outs from the assets the Prudential inherited from other companies. However it has been decided that the inherited funds will be better employed withn the organisation right now, especially in the current economic climate where financial institutions are looking to maintain as much financial fluidity as they can.
Customers of the Prudential will surely not feel too aggrieved by the decision since it looks like the sensible and considered option to most commentators. It is better to have a strong business than no business at all.