The question as to whether annuity rates will increase in 2010 will be one which many on the brink of retirement will be asking themselves. Given recent falls in the performance of the equity investment market coupled with the fact that we are all living longer, there doesn’t seem to be much hope that the long-term trend of rates falling should in anyway be reversed. Over the past fifteen years, rates for men have dropped by some 45% and some 42% for women. In fact very recent trends show a sharper fall in rates as Which.co.uk put it…”Since November 2008, rates for men have dropped by 10.8%, while the average annuity rate for a woman has decreased by 11%.”.
However just because annuity rates have fallen does not mean that you should discard the idea of purchasing an annuity altogether. An annuity is a good way to ensure a secure and predictable income at retirement. Given that rates have been on a downward trajectory, it may be good time to purchase an annuity now, particularly as gilt prices fell recently. Remember every month you delay an annuity, you are missing potential income from annuity payments. However, in the end only you can make the decision over when to buy an annuity.
