Retirement: How to buy an Annuity

We regularly write articles about Annuities, often looking at topics such as why Annuity rates have fallen, the options  available to you, the importance of using the Open Market Option, and Annuity alternatives. However, we thought we would go back to basics with this article and look at the stages involved in buying an Annuity and what an Independent Financial Adviser (IFA) does when arranging an Annuity on your behalf. So what should an IFA do when arranging your Annuity? Stage 1: Understand your requirements Successfully buying an Annuity isn't simply about finding the best rate, although that is clearly important....

High inflation eating away at Annuities

New research has confirmed just how much the current high levels of inflation are eating away at the buying power of level Annuities. The research from MetLife, who offer a range of Annuity products, has shown that the buying power of a level Annuity has fallen by 16% over the past five years. Inflation Each month seems to bring a rise in inflation and at present the Bank of England seem to be reluctant to increase interest rates, the usual way of controlling inflation; for fear that such a move would further dampen the already sluggish economic recovery. Furthermore, the Bank last month ...

Annuity rates fall to new low

Annuity rates have fallen to record lows over the past few weeks leaving pension savers potentially worse off in their retirement. The Investment Sense benchmark Annuity (Male aged 65, female aged 62, £100,000 non protected rights, level, no guarantee, 50% spouse’s pension payable monthly in arrears) has fallen by over 6% since the middle of the summer and the indications are that we may be in for further reductions in the months and weeks to come. Using a pension Annuity calculator will help you see exactly what Annuity rate you could get right now for your specific circumstances. Falling gilt yields The trend ...

Annuity rates: Why have they dropped and where are the heading?

The summer is normally a quiet time for Annuities, not this year, rates are dropping and the stock market, where huge amounts of pension savings are held, is volatile to say the least. Any basic Annuity rates comparison shows that over the past few years the trend has been downward, this is in the most part down to falling gilt yields and increase longevity; we are all living longer. We speak to large numbers of potential Annuity purchasers and many are concerned about the right time to buy their Annuity and whether rates will ever start to rise again. In light ...