it is suggested that saving is no longer the wise thing to do due to the volatile annuity rates.
(PRWEB UK) 11 November 2012
A governmental auto-enrolment plan to encourage over 10 million workers to save for retirement may be at risk due to poor annuity rates, it has been suggested.
Annuities, it has been commented, are now seen as a poor way to invest pension savings and those who feel pressured to buy an annuity may be discouraged completely from a pension. Malcom McLean of Bennet Waddingham alluded that the poor annuity rates ‘risk’ ruining the success of the auto-enrolment retirement scheme.
Usually retirees will save and purchase an annuity so that they do not have to manage their investments and can ensure they receive an income during retirement. However, it is suggested that saving is no longer the wise thing to do due to the volatile annuity rates.
Several providers are concerned about these suggestions, which have resulted in asking the government to reduce the amount of red tape surrounding how retirees can use their pension pots. Moreover, they are calling for people to be allowed to access their savings when they require it, instead of it being tied up until they retire.
The speculation has arisen after annuity rates dropped by a whopping 7% in the last 3 months. Those who are concerned about the state of their pension pots when they are ready to purchase an annuity can use an annuity calculator. However, it is expected that annuities will not be improving for some time, which is a constant worry to retirees.
My Pension Exper t is a company of Diploma Qualified Independent Financial Advisors who specialise in the at retirement market.