Pensions - Articles - John Lawson reponds to BoE: QE impact on pensions


John Lawson's response to BoE: QE impact on pensions

 "The Bank of England arguments as to the impact on pensions appear reasonable. However, they have failed to mention the one area of pensions where the impact of QE has been bad for customers - income drawdown. Income drawdown limits which are supposed to mimic annuities have fallen much faster as they are based upon medium dated gilts as compared to annuities which use long gilts and corporate bonds. This unfairness could be rectified by linking the GAD maximum tables for drawdown to a 50%/50% portfolio of long gilts and long investment grade corporate bonds in order to maintain a fair reflection of annuity rates. The needs of drawdown customers have to be recognised."

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