Leading pension experts have this week advised those approaching retirement age should lock in the gains made on the stock market by purchasing an annuity, before the rates fall again. There have been big rises in the UK equity and managed funds which have increased 47 per cent and 31 per cent since March of this year. However, stock market analysts say that the gains made could be lost and that now might be the correct time to lock in the gains made by acquiring an annuity product.
Annuity providers such as insurance companies have also been cutting annuity rates, for example the benchmark rate for a 65 year old fell 7 percent in October, the first fall for 24 months. Experts predict that rates will fall further, partly due to the quantitative easing by the Bank of England. Those retiring now are advised to buy an annuity when the pension pot and annuity rates have hit their highest watermark. This will ensure the maximum income.
Event those who are not set to retire for a number of years, it may prove better to buy the annuity now, as to avoid the possible fall in the stockmarket and annuity rates.
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