The income for those seeking to buy an annuity within the next ten years could be significantly lower than those who already have an annuity due to the global economic slowdown. Many could incur “extremely painful” financial losses as a result of a sluggish economy and lower rates for annuities. The website everyinvestor.co.uk has recently reported that many people will now be considering alternatives to an annuity such an an unsecured pension / income drawdown or a SIPPS.
Pension expert Dominic Grinstead, who is MetLife’s Managing Director explained that the problem may not be as bad should you have many working years ahead of you and that those “… people who are still working and have years to retirement, then the cost may just be a blip.” He added that anyone due to retire in the near future could experience more “complicated retirement planning“.
There is little doubt that the next decade will be very challenging for the pension annuity market in the UK. But with more diversity and better transfer times being reported recently there are some reasons to be optimistic.
