Retirement specialist MGM Advantage are forecasting that rates for pension annuities will increase thanks to the impasse in the general election. Craig Fazzini Jones from MGM Advantage said that the indecision in Westminster would have an advantageous impact on rates. He said that…”…gilt prices have fallen and yields risen which we expect will have a positive impact on rates – especially when you combine this with the fact that the Bank of England is purchasing fewer gilts and there is a renewed focus on inflation risk.”
Pension experts believe that if this does happen, it will come as welcome relief to the annuity industry which has been suffering from falling rates of late. MGM Advantage’s own figures show that between December 2009 and March 2010 rates fell by just over half a percent. Despite this good fortune in the political system, potential annuitants are still being urged to shop around for the best deal using the OMO (Open Market Option) and not make any rash decisions based purely on short-term market fluctuations.
