Pensions

Has anyone any experience in this country of private (i.e. not state or employee) pensions (or, more accurately, annuities) - not involving investment in the stock market and probably funded in a lump sum from private cash. This could be for an expat or, more likely, a wife (as the expat might not be around long enough to benefit (sorry folks)).

I am very aware of pensions within the UK and note that a lot of Insurers here have the same names as UK companies (e.g. Sun life, Axa, Pru) although I am not aware how they are linked.

My thinking about this is for the future but just thought I would ask now in case the membership of this forum declines much further!

 

In terms of minimizing risk and costs, your best bet may well be to enquire about investing in long term Philippine State government bonds.
These are issued regularly by the Philippines Treasury, and traded publicly. The bonds are conveniently issued in multiple nominal values, although I am guessing the 1 million denomination will be the most traded one (best liquidity).
Actually a 20 year bond was (re)issued this week, at a yield of around 6.4% p.a.
Basically it makes sure you get your money back in 2044 and pays that 6.4% yield until then.
Talk to your bank about how you could invest in these, and what the transaction costs and ongoing costs would be. I would hope and expect that those costs would be very low, as in at most 0.5% transaction cost and yearly costs of no more than 0.2%.
The one thing you would deal with obviously is the withholding tax of 20% of earnings (received coupons).
Whether that percentage would ultimately be owed in income tax depends on overall taxable income obviously, paid withholding tax will be credited to the income tax liability.

 

BDO has a bond with only a 3 year tie in period paying 4.24% interest net of tax, see attached.