Advice You - Finance

It’s now unlikely that the state pension will be enough to keep you living comfortably when you retire. It provides only basic support, and the government itself is keen to encourage people to save as much as they can to supplement their state pension and give themselves a comfortable income in retirement. Combined with better health i

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

n the general population – meaning longer life expectancies – and dwindling stock market returns over the last decade or so, the so-called ‘pension crisis’ is a call to action for people to plan their finances carefully and put more and more cash aside to ensure a safe and secure future for themselves.

This article is the second of tw

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

guides examining the fundamentals of pensions. The first guide focuses on state pension provision, while this one outlines some of the possibilities for making personal pension arrangements. They are intended for information only and do not constitute financial advice. It is recommended that you speak to a financial advisor for profes

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

ional advice on planning your finances for retirement.

Saving for the future

There are lots of ways in which you can save for the future – savings accounts, stocks and shares and property investment, for example. However, all of these are subject to tax. Pension schemes are much more tax-efficient as tax relief is given on contributi

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

ons made and the income they provide during retirement is tax-free. This is why pensions are a common way of saving for retirement.

There are two main types of personal pensions – final salary and money purchase. The first can only be provided through occupational schemes, but the second can be purchased privately on an individual bas

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

s.

Final salary

Final salary schemes, also known as defined benefit schemes, provide a guaranteed income based on a percentage of salary earned during your final year of work as well as length of service with the company. It’s possible to retire on up to two thirds of your final salary.

As it guarantees to provide a certain level of

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

income, it’s often considered to be the best type of pension scheme available. However, there has been a decline in the number of employers offering final salary schemes in the last few years because of the expense of maintaining them. Falls in the stock market have seen many pension investment funds drop drastically in value, meaning

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

that the employer must make up the difference in order to provide the guaranteed income to the scheme’s members. Another expense for employers with final salary schemes is the 10% tax levied on dividends, a measure introduced by the government in 1997, which again can have a detrimental impact on the size of pension funds.

Money purch

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

se

With money purchase schemes, also know as ‘defined contribution’ plans, members make payments into a fund which is then invested into the stock market. On retirement, the accumulated funds are used to buy what’s called an annuity, which provides a regular retirement income. The amount you’ll receive in retirement isn’t guaranteed –

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

it depends on how well the stock market has performed and on annuity rates at the time that you take out your annuity. Whereas final salary pensions put the burden of risk on the employer, who must make up the amount to a guaranteed level, it’s the member who’s responsible for the risk of a shortfall in money purchase schemes. Members

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

ay therefore need to save more cash independently to ensure they’ll have a comfortable retirement.

You’ll have some flexibility to choose what funds your money is invested in, and your decisions will depend on your attitude to risk. Higher risk investments can provide much greater potential returns, but at the same time can also make

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

the biggest losses. ‘Safer’ investments will reduce the risk of losses but will not be likely to yield as big returns as higher risk investments.

Annuities

An annuity is a fixed, regular amount of money paid to someone, usually for the rest of their life, which is purchased using a lump sum from a pension fund, for example. It’s inve

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ted in the stock market, usually in funds considered to be safe. Annuity rates have plummeted in the last decade, meaning that many people are now expecting lower annuity incomes and are having to change their retirement plans. However, there are various different options when it comes to annuities. Members aren’t obliged to take out t

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

e annuity offered by their own scheme – they can use their accumulated pension funds to buy an annuity from any annuity provider on the open market, where they may be able to get a better rate. It’s also possible to take up to 25% of the pension fund as a tax-free cash lump sum, leaving the other 75% to purchase an annuity. A third opt

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

ion is to take out a short-term annuity of up to five years to keep your pension invested for a little longer in the hope that it will increase in value to allow you to purchase a better lifetime annuity further down the line. Another way of delaying taking out an annuity is to receive an income directly from your pension fund, keeping

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

it invested in the hope of gaining higher returns to sustain the income received.

However, the value of the funds could fall just as easily as they could rise, which may leave you worse off. This option is known as an ‘unsecured pension using income withdrawal’. Finally, it’s possible not to purchase an annuity at all and instead rece

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ve an income directly from your pension fund from the age of 75 with an ‘alternative secured pension’. Before 2006 it was a legal requirement to purchase an annuity from pension funds by the age of 75, but the law changed to allow people over 75 to receive this type of income instead, although the total amount of income that can be dra

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

wn down from it is 70% of a lifetime annuity. It’s intended for people who are opposed to purchasing annuities on ethical grounds as a result of their religious beliefs.

Stakeholder schemes

Stakeholder pensions were set up by the government in 2001 with the aim of facilitating access to personal pensions for people whose employers do

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

’t run occupational schemes. As with money purchase plans, stakeholder pensions invest in the stock market, bonds and cash savings accounts and accumulate funds which are used to purchase an annuity upon retirement. They’re designed to be easy to understand, flexible and lower cost than other pension plans. The maximum charge that admi

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

istrators will be able to charge each year for managing the funds is 1% of the value of the fund, and they cannot charge penalties if members wish to transfer cash in or out or stop contributing. However, there’s a limit to the amount that can be invested, so they’re designed for people on low to middle incomes rather than high earners

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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