Making payments towards your pension is one of the most important things you’ll ever plan for, but the reality is that the majority of people are unaware of precisely how much money they should save to ensure a comfortable living after they retire, recent research by HSBC reveals.
Data published by the Pension Policy Institute shows that 30% of people aged between 60 and 64 are limited in their ability to be employed because of a disability, therefore many find it necessary to retire prior to pension age. Consequently, more people must rely on pension funds earlier than expected.
The rules on how annuity rates are calculated will change this December.
Following MetLife’s decision to exit the fixed-term annuity market, Primetime Retirement, LV=, Just Retirement, and Aviva say they remain.
Research conducted by Towers Watson has revealed that enhanced annuity rates have soared and surpassed a billion pounds in the second quarter of this year. The figures showed that sales from the first half of the year were 1.99bn, which is an increase of 39% in comparison to the same time frame in 2011.
Choosing an annuity is an important decision in life and it is best to seek independent advice on the matter. An independent adviser can help with the small print and what deal is right for you.
Recent drops in the rate of inflation could see more quantitative easing by the Bank of England economists have warned. This could have a dire effect on annuity rates as a result as it has been found cuts in annuity rates occur when prospective quantitative easing is anticipated from the Bank of England. Falling prices for key items such as petrol and clothing contributed to downward pressure on the UK’s rate of inflation.
Pensions minister Steve Webb recently proposed a process in which a pension fund would follow a worker as they moved from job to job. However it has recently been warned that workers with smaller pension funds could risk missing out on much needed annuity advice.
As annuity rates free fall, people are being warned not to delay in purchasing annuities in the hope of receiving a higher income. Rates are likely t remain low for the short term.
As pressure is put on annuity rates, specialists in the area of retirement income, MGM Advantage, have analysed whether or not it pays to delay your annuity purchases. There is an idea that you may receive a better income if you waited a year or two.
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