Creating a redical new pension
An Eagle Star case study

Page 1: Introduction

In order to enjoy a comfortable retirement, individuals need to take responsibility for their future. Creating a pension should not be delayed as there may not be time to save enough to maintain a good standard of living. It is important that young people understand what is involved in taking out a pension when they start work - planning their pension gives them more security over their working...
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Page 2: How much does retirement cost?

In order to appreciate the importance of pensions, it is helpful to consider what retired people need to buy with their pensions. A 65 year old man retiring today and requiring a yearly income of £10,000 for the rest of his life would need to have put aside around £130,000 as an annuity. You are most likely to have come across the term annuity when playing ‘Monopoly’ - a...
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Page 3: Types of pension

Pensions can be very complicated - there are many different types and individuals may have more than one. The main sources of pensions are: State pensions These include the basic old age pension, the state earnings-related pension scheme (sometimes called SERPS) and for people who began their working life between 1961 and 1975, the graduated retirement pension.State pensions depend largely on...
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Page 4: Creating a new pension

In January 1997, Eagle Star, one of Britain’s leading life and general insurers launched the UK's first personal pension with a money-back guarantee. The Eagle Star Direct pension - believed to have the simplest and lowest charges on the market - signalled a major challenge to other firms offering pensions to the public directly over the phone (such as Virgin and Scottish Widows). In...
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Page 5: Competition

When Eagle Star launched its innovative new pension scheme, it needed to be aware of the main competition in the segment of the pension market that it had chosen to enter. At the time, Richard Branson’s Virgin Direct pension launch was generating extensive positive coverage in the consumer media. Eagle Star acknowledged publicly that Virgin had set a new benchmark for the industry and...
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Page 6: Conclusion

Today, personal pensions provide individuals with security in a world of constant change and uncertainty. An increasing number of people are recognising the need to cover themselves financially after they have stopped working. In selecting a pension scheme, it is essential to identify a range of key benefits which meet individual needs and requirements. Increasingly, people are looking to...
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