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dc.contributor.authorCannon, Edmunden_GB
dc.contributor.authorTonks, Ianen_GB
dc.date.accessioned2010-04-13T15:38:53Zen_GB
dc.date.accessioned2011-01-25T10:28:30Zen_GB
dc.date.accessioned2013-03-20T11:11:04Z
dc.date.issued2010-01en_GB
dc.description.abstractThis paper describes the operation of both the compulsory pension annuity and voluntary annuity markets in the UK. The paper reports on the movement of UK annuity price quotes in the voluntary market from 1957-2009, and in the pension annuity market from 1994 to 2009, and examines whether annuities were fairly priced over this period. The paper computes the money’s worth of annuities, and finds that on average the money’s worth in the voluntary market over the sample period for 65-year old males has been a very high 98%. In the larger compulsory pension annuity over a shorter sample period we estimate that the money’s worth for 65-year old males has been 89%, and for 65-year old females has been a similar but slightly larger 90%. Taking into account load factors associated with annuity contracts and in comparison with other financial and insurance products this implies that annuities are fairly priced. However the value of the money’s worth is sensitive to the assumptions made about life expectancy, and we explain the assumptions made about the appropriate life tables to apply to annuitants in these annuity markets. There is some evidence that money’s worth has fallen since 2002. We discuss a number of factors that could have effected the fall in money’s worth, including: changes in insurance regulation; changes in industrial concentration; an insurance cycle; pricing of mortality uncertainty and the growth in the impaired lives market.en_GB
dc.description.sponsorshipPart of this work arose out of a project at the Department of Work and Pensionsen_GB
dc.identifier.urihttp://hdl.handle.net/10036/96441en_GB
dc.language.isoenen_GB
dc.publisherUniversity of Exeter Business Schoolen_GB
dc.relation.ispartofseriesXfi Centre for Finance and Investment working papersen_GB
dc.relation.ispartofseries10/01en_GB
dc.relation.urlhttp://xfi.exeter.ac.uk/workingpapers/1001.pdfen_GB
dc.subjectannuitiesen_GB
dc.subjectannuity marketsen_GB
dc.subjectpension replacement ratioen_GB
dc.titleCompulsory and voluntary annuities markets in the UKen_GB
dc.typeWorking Paperen_GB
dc.date.available2010-04-13T15:38:53Zen_GB
dc.date.available2011-01-25T10:28:30Zen_GB
dc.date.available2013-03-20T11:11:04Z
dc.identifier.issn1743-548Xen_GB
dc.descriptionWorking paperen_GB


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