Over the last few years, annuity rates have been falling, meaning that those people looking to convert their pension funds into income have been hit hard. Basically, the lower annuity rates are, the more money you have to use in order to achieve the income you need. However, according to the publication Life and Pensions Moneyfacts, annuity rates have been falling at a lower level over the last year.
Our View
Annuity rates are exceptionally low at the moment and may not improve for a number of years. This means that those people looking to purchase an annuity must search the market for the best deal. For an average 65 year old male purchasing an annuity, he should receive payments for at least 20 years. If you did not choose one of the better annuities, you could be penalising your standard of living for the rest of your life. Shopping around for the best annuity rate is easy and you could gain hundreds, if not thousands for searching. If you have a private pension, always us the Open Market Option facility. This means you can shop around for the best annuity on offer and take your pension fund to them to buy your annuity. Do not just buy the first annuity you are offered!
Visit 'At Retirement - Your Options' in the Pensions Adviser.com.