Annuity rates are in free fall and the baby boomers are feeling the full blow of the rate drops. This time of record low rates will mean lower income for life for those retiring during these tough economic times.
(PRWEB UK) 17 October 2012
Average annuity rates have tumbled by 7 per cent in the past three months, according to the latest MGM Advantage Index. This is the biggest quarterly fall recorded by the Index since its launch in August 2009. The report also indicates a 20 per cent drop in average annuity rates between August 2009 and this September.
Aston Goodey, of MGM Advantage, said: “Annuity rates are in free fall, largely driven by record low gilt yields. We expect further falls over the coming months unless we see a significant upward movement in yields.”
The research indicates that the difference in retirement income between the top enhanced annuity rates (available to customers with risk factors, such as high blood pressure) and bottom standard annuity rates for those aged 65-plus with a £50,000 pension pot, is 44 per cent for men and 48 per cent for women.
GAD rates have dropped to their lowest possible level for November and this is usually a sign of things to come. In addition to this the European gender equalisation legislation will come into effect in December which could reduce rate for men by a further 8%.
Scott Mullen of My Pension Expert the annuity specialists said "Annuity rates are in free fall and the baby boomers are feeling the full blow of the rate drops. This time of record low rates will mean lower income for life for those retiring during these tough economic times and will take Billions of income spend out of the UK economy for years to come. To secure the best rate people should take independent advice and shop around for their annuity. This could make a significant difference to the income they can receive.
My Pension Expert are a company of Independent Diploma Qualified Financial Advisors who specialise in the at retirement market.