Annuity rates have tanked by 14% so far this year, with a £100,000 pension pot now buying a 65-year-old £4,654, £759 less than at the start of the year, according to research by Hargreaves Lansdown.
Rate changes have been even more pronounced for younger retirees. A 60-year-old with a £100,000 pension who bought an annuity at the start of the year would have received an income of £4,776 but the same person retiring today would get just £4,051, a 15% decrease. Over the course of a 20-year retirement, that's a difference of £14,500. Fears of a no-deal Brexit and a slowdown in the global economy have increased the cost of buying the secure investments that insurers use to underpin annuity pay-outs. It's currently making keeping your pension invested look more attractive than it probably should do.
About the Author: Glen Callow
