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HKMC Annuity Plan

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  1. #11

    Join Date
    Nov 2005
    Location
    Cramped island
    Posts
    5,585
    Quote Originally Posted by HK_Katherine:
    How about this example?

    Compare it to putting your money in a crap investment that loses money (rather than makes 3 or 4% pa).

    Plenty of people do that. Plenty of people have no clue what a "good investment" looks like. More likely to take advice from "uncle fred heard on the grapevine that we should buy the Xaoimi IPO" than anything else.

    Its hard to evaluate the risk of people making bad investments and losing their shirt. Given that one probably wishes to have a comfortable retirement, certainty of income is probably more important than absolute gains. If you have no family, who cares about the residual value anyway? And if you do have family, why should they get more benefit than you do?
    I can agree with you, but i also think these guys that are going to be buying xiaomi or anything else on a whim because of other friends recommendation are going to end up to be the guys that feel after receiving 100 payments that they should draw out the surrender value and invest themselves etc.etc.etc... i.e. doing all the wrong things that should not be done once you purchase such a plan.

    but at least one thing good about this, it should be less predatory than the annuity plans that large insurance company or IFAs are bugging everyone to buy...
    HK_Katherine and z754103 like this.

  2. #12

    Join Date
    Aug 2012
    Posts
    14

    This is an old thread now, but does anyone know whether this government annuity would be taxed as and when one returned to the UK? Some overseas annuity payments there are taxed only on the interest portion and not on the return of capital. As this is a government backed annuity it could be argued that payments are all capital being returned until the 177th month out of 182 and thereafter.


  3. #13

    Leon,

    from my understnading of the UK tax, yes you are taxiable for capital gain and even on your retirement, hence I've moved mine back to HK.
    Depending on your age, there are other alternatives that I would say might be a better option.


  4. #14

    Join Date
    Feb 2012
    Posts
    411
    Quote Originally Posted by amir1993:
    I agree! apart from MPF, other insurance providers have much better annuity plans than this.
    I'd disagree that other insurance providers have better annuity plans than a guaranteed 5%, that allows account closures without hardly any penalties almost anytime. I'm not saying 5% is the best, but I'd say it's alright and it's not designed for profit like most annuities.

    Name one annuity in HK that offers a better return, the same or more flexibility, and the impossible task would be one that isn't designed with profit for the insurer in mind?