Many retirees are being short changed by approximately Â£20,000 by inflation-linked pensions. Every year, people purchase annuities with the hopes of guaranteeing a secure, steady income, which rises gradually until they die; yet inflation-linked pensions are changing this.
Many of the UKâ€™s insurers have given retirees some positive news after raising their annuity rates due to higher gilt yields. An increase since the beginning of 2013 in government bond is now being felt by consumers purchasing annuities with Legal & General, MGM Advantage, Just Retirement and LV=.
Would you take medical advice from someone who was selling cars last week? Well why would you trust that same person with your retired life’s income?
On retirement the money an individual has saved in their pension plan is used to buy an “annuity,” a type of insurance policy which ensures a consistent income or pension in exchange for their lump sum.
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