Those approaching retirement and looking to buy an http://www.mypensionexpert.co.uk/ [annuity __title__ Annuity] will see their annuity rates be affected considerably. Crucially, the decline in interest rates will see them locked into the current annuity
(PRWEB UK) 3 August 2012
The increasing apprehension surrounding the economic crisis and problems within the Euro Zone suggests interest rates will not begin to rise until August 2015, a new study predicted. Forecasters expect interest rates will not hit 0.75% until August 2017 and a drop can also be expected anytime to 0.25%, continuing to play havoc with savings and annuity rates.
These new predictions are a contrast to those made a few months ago, whereby interest rates were set to reach 0.75% in August 2014. The continuation of the crisis, woes in Spain and Europe has altered the predictions, which can only mean bad news for consumers.
According to a recent study from MetLife, the drop in interest rates could significantly affect annuity rates. They say that while increase longevity does have an effect on rates, the biggest impact comes from a drop in interest rates they have found that a 1% drop in the base rate can affect annuity rates ny as much as 10%.
Scott Mullen of My Pension Expert the annuity specialists said “those approaching retirement and looking to buy an annuity will see their annuity rates be affected considerably. Crucially, the decline in interest rates will see them locked into the current annuity rates without benefiting from any potential improvement in the future.”
While the crisis has been affecting the financial world for some time, the affect it has had on shares, savings and pensions has been overwhelming. It is recommended that financial advice be taken before making any important retirement decisions
A further cut in interest rates will see more pain for those nearing retirement