Falling annuity rates and legislative changes mean that those thinking of drawing their pension in the near future should do now.
(PRWEB UK) 26 October 2012
From this December a new EU directive will directly affect annuity rates.
Men are most likely to be paid out less than they expect, as the new directive will stop gender being considered when payouts are calculated.
Because the life expectancy of a UK male is shorter than that of a female, men have traditionally been granted higher annuities as it is assumed they will withdraw for less time. From December this will be illegal.
Nigel Green, chief executive of deVere Group said: “Falling annuity rates and legislative changes mean that those thinking of drawing their pension in the near future should do now.”
Green also advises anyone soon reaching retirement to act quickly, as rates have been slashed 14 times since July, a trend that he predicts to continue.
Mark Stone, of Whitechurch Securities, encourages investors to conduct research before they withdraw, stating they should check if the company they are withdrawing annuity from takes this ruling into account at present.
If not, he believes men should think about taking annuity prior to the December change.
Lifestyle, medical history and location are now more influential factors, meaning that providers may pay out an increased annuity in an area where life expectancy is lower.
Also, Basel I I legislation comes into force in 2013 which means that businesses must hold greater reserves against annuities, encouraging them to stay low.
Stone recommends individual research as a pension provider may not be the best choice for withdrawing annuity from.
Scott Mullen of My Pension Expert the annuity experts said "At least one major annuity provider has decided to bring forward equalisation of male and female rates to November and others could follow suit."
My Pension Expert is a company of Diploma Qualified Independent Financial Advisors who specialise in the at retirement market.