Annuity payouts are 50% lower than they were just 15 years ago, according to the latest data from pension experts. This is bad news for those approaching retirement who are looking to gain the best annuity rates. The fall in the value of gilt yields and the weakening investment market has meant that pension annuity providers have not been able to offer high rates for retirees.
Many will now be questioning whether now is a good time to buy an annuity. The temptation will be to wait until the equities market improves and higher rates can be achieved, but this is not always an option as many retirees will not have any income without an annuity purchase.
The situation is compounded by the fact that around 66% of annuitants don’t bother to shop around for an annuity, and take the first offer from their existing provider. In fact, the latest report on the matter deduces that pensioners are costing themselves as much as £14 million in poor annuity deals. That is either through not shopping around or by not getting the right option, such as an enhanced annuity for those with medical problems for example..
