A review by Moneyfacts, has revealed that annuity rates have fallen by almost half over the past 10 years. The average rate for a person aged 60 buying a standard without guarantee annuity at £10,000, dropped 1.47% for men and 1.05% for women during 2004.
Our view
The reality is we are in a low interest rate economy. This has a knock on effect when people buy their pension income at retirement. As we continue to live longer, we can only see longer term annuity rates worsening. The reality is we all need to have much bigger pension pots than our parents and grandparents did in the 90's or indeed the 80's.