Investigators at City University of London Describe Findings in Insurance Economics (The effect of longevity drift and investment volatility on…

Investigators at City University of London Describe Findings in Insurance Economics (The effect of longevity drift and investment volatility on income sufficiency in retirement)

By a News Reporter-Staff News Editor at Insurance Weekly News -- Investigators discuss new findings in Economics - Insurance Economics. According to news reporting originating from London, United Kingdom, by VerticalNews correspondents, research stated, "In 2014 the Government announced radical proposals which now allow people to withdraw money from their pension pot from age 55, 'how they want, subject to their marginal rate of income tax in that year'. The main effect of this change will be to put more onus on the individual to make sure they have sufficient resources to last for their retirement, but it also removes the obligation to annuitise their funds at any future age."

Our news editors obtained a quote from the research from the City University of London, "This paper is concerned with how people can best use their pension pots by aligning them to their personal financial objectives and longevity risks. It finds that for most people annuitising is not the best option, except for a few circumstances, and that draw down is preferable, especially where there is a bequest motive and the individual has assets such as property to fall back on."

According to the news editors, the research concluded: "These options are low risk if simple rules are followed but they are not a substitute for professional advice and should only be used in conjunction."

For more information on this research see: The effect of longevity drift and investment volatility on income sufficiency in retirement. Insurance Mathematics & Economics, 2018;78():201-211. Insurance Mathematics & Economics can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands.

The news editors report that additional information may be obtained by contacting L. Mayhew, City University of London, Fac Actuarial Sci & Insurance, Cass Business Sch, London, United Kingdom. Additional authors for this research include D. Smith and D. Wright.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.insmatheco.2017.09.013. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Keywords for this news article include: London, United Kingdom, Europe, Insurance Economics, Economics, City University of London.

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