Annuity rates hit all-time low
Annuity rates have hit an all-time low, according to new research from Moneyfacts.co.uk.
Insurers that provide annuities offer a monthly income in exchange for a retiree’s pension pot and rates have apparently been falling steadily for months.
The financial website claims that the average rate for a male aged 65 purchasing a level without guarantee annuity (based on a £10,000 purchase price) has decreased by 6.3% in the past year, whilst the equivalent female annuity has seen a 5.6% reduction.
The declines mean that the average annuity rate for a male has dropped by 45.5% over the last 15 years, while female rates have fallen by 41.8%.
Moneyfacts editor of investment life & pensions, Richard Eagling, explains: “There has been a spate of annuity re-prices over the summer months which has unfortunately left rates at record lows.”
He adds: “With gilt yields still low and life expectancy increasing we can expect annuity rates to fall further still.”
Mr Eagling is therefore predicting that tomorrow’s pensioners will face a “desperate battle” to secure a comfortable retirement.
Category: Insurance News
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