Prudential's' annuity index has found that there has been a fall in returns of 4% for those retiring today, compared to a year ago, and they are at their lowest levels for thirty years.
The index was based on returns from annuities purchased with pension pots of £100,000 with no escalation or guarantees. The annuity index has shown that a 65 year old man retiring today would receive £6,540 today, compared to £6,730 in 2005, while a woman would receive £4,950 today, compared to £5,530 in 2005.
There have been similar levels of falls for joint life annuities and impaired life annuities.
Our view
Annuity rates are linked to gilt interest rates and have been poor for many years.
Expect much of the same over the years to come
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