Annuities: Is it worth buying an RPI linked Annuity?

Despite inflation being on a downward trajectory for most of 2012, many financial experts believe that a combination of higher food and energy prices, plus the effects of Quantitative Easing (QE), could mean that the rate of inflation starts to rise significantly as we move into 2013. So, given that inflation erodes the buying power of fixed incomes, should would-be retirees be seriously thinking about buying an RPI linked Annuity? How expensive is RPI linking? Inflation proofing your income is important; after all, who want’s the buying power of their income to reduce? However, as the tables below show, buying an RPI linked ...

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 ...