Plummeting pension annuities are affecting record numbers of Britons
10
Oct
New data from the 2011 census reveals that record numbers of Britons will reach retirement age this year as the post-war ‘baby boom’ generation turns 65. In fact, the overall number of people turning 65 in 2012 has leapt by 30 per cent in a single year.
This is coinciding with annuity rates dropping by record amounts – seven per cent in three months – and a fall in the value of annuities means reduced pension incomes.
With an unprecedented number of people hitting retirement age and with many set to receive lower than expected retirement incomes, I believe we are entering a toxic new phase of the UK’s pension crisis.
Annuities remain the only viable option for most people at retirement and as annuity rates continue to plummet, and as the number of Brits reaching retirement age grows, more and more will be facing a perfect pensions storm
If you are around 70 years old, and puahcrse a fixed, life time annuity, you can get a 9% annual return, providing you agree to a non-beneficiary clause and no cost of living increases. When you die the insurance company keeps your investment. If you are single and have no heirs, i think it’s a no brainer. That 9% annual return is 75% tax free for the 1st 15 years. If you are 75 years old when you puahcrse the annuity, the rate of return is around 10-11% annually. If you plan on living to 90 or longer, makes a lot of sense.You don’t have to worry about any major downturns in the stockmarket or devaluation of the dollar. Certainly would not work for most people. I puahcrsed 6 of them when i turned 70. All of the top insurance companies offer this.