Good news for your pension? – interest rates are up.
As the UK reacts to the Bank of England’s decision to increase the interest rate for the first time in a decade, those preparing for retirement can expect to see their pension pots rise to the occasion.
While the interest rate change is small, going up to 0.5% from 0.25% – the lowest level in the Bank’s history – it still could be a positive result, if you choose to use your pension to buy an annuity and secure an income for life.
Annuity rates are impacted by government gilt yields, and given that the increase has been widely expected, yield on gilts has been increasing over the past month (October 2017), in turn improving the rate on annuity products and offering better pension outcomes.
So, it could be good news for near-retirees seeking a guaranteed financial future, but for many there is still the uncertainty of which product to opt for to get the best value for money.
Our advice? Ask the professionals now.
You can do whatever you like with your pension pot thanks to pension freedoms, but we know that this can cause confusion and worry.
At My Pension Expert, our advisers have helped over 10,000 people to understand the different options available and find a pension product that suits their individual circumstances.
Working across the whole market, we know the very best deals available, plus we can benefit from preferential rates, meaning more for your money, and with better interest rates comes better deals.
And if you’ve already had a quote but now feel unsure following the base rate news, we can support you through the next steps. We’ll search the market to make sure you choose a product that considers your financial goals, taking into account your lifestyle, health and wealth and can help to switch provider. Many of our customers have benefited from making a switch to make the most of their pension pot, with an average tax-free lump sum of £18,333 gained in the process and with the rise to interest rates now in force, it could mean you too could be better off.
Even if you’re not quite ready to access your pension, we can help you to prepare your finances to fund your retirement. With gradual rises to the interest rate expected over the next couple of years, annuity rates will likely follow, so our advice is to be prepared sooner rather than later.
So, how will the interest rate change impact your financial future? Why not give one of our friendly Retirement Technicians a call today free on 0800 6899 335 and find out how your pension outcome could benefit.