Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
S&P Stock Market Trend Forecast to Dec 2024 - 16th Apr 24
No Deposit Bonuses: Boost Your Finances - 16th Apr 24
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Retirement Distress as Annuity Rates Hit All Time Lows

Personal_Finance / Pensions & Retirement Aug 31, 2010 - 05:15 AM GMT

By: MoneyFacts

Personal_Finance

The prospects of securing a comfortable retirement have taken a further blow with news that pension annuity rates have hit an all time low.

Research from Investment Life & Pensions Moneyfacts has revealed that annuity rates have fallen steadily over the summer months following a spate of re-pricing activity amongst providers.


The average rate for a male aged 65 purchasing a level without guarantee annuity (based on a £10K purchase price) has decreased by 6.3 per cent since last August, whilst the equivalent female annuity has seen a 5.6 per cent reduction over the past year. (see table 1).

The latest reductions mean that the average male annuity rate has dropped by a massive 45.5 per cent over the last 15 years, whilst female rates haven fallen by 41.8 per cent (see table 2).

Table 1: Falling pension annuity rates over the last twelve months

 

Average
annuity rate
Male aged 65

Average
annuity rate
Female aged 65

26 August  2009

£647

£605

26 August 2010

£606

£571

1 year change

-6.3%

- 5.6%

Figures show gross annual annuity payable monthly in advance. Figures based on an annuitant aged 65 buying a standard ‘level without guarantee' annuity for a purchase price of £10K.
Source: Investment Life & Pension Moneyfacts 26.8.2010

Table 2: 15 years of falling pension annuity rates

 

Average
annuity rate
Male aged 65

Average
annuity rate
Female aged 65

26 August  1995

£1,111

£982

26 August 2010

£606

£571

15 year change

- 45.4%

-41.8%

Figures show gross annual annuity payable monthly in advance. Figures based on an annuitant aged 65 buying a standard ‘level without guarantee' annuity for a purchase price of £10K.
Source: Investment Life & Pension Moneyfacts 26.8.2010

 

“With every passing month the outlook for those approaching retirement appears bleaker,” commented Richard Eagling, Editor of Investment Life & Pensions Moneyfacts. “There has been a spate of annuity re-prices over the summer months which has unfortunately left rates at record lows. In a few months time the first baby boomers will hit retirement. Often perceived as the lucky generation, they are likely to face a rude awakening when they come to secure their retirement income via an annuity. With gilt yields still low and life expectancy increasing we can expect annuity rates to fall further still. Tomorrow’s pensioners face a desperate battle to secure a comfortable retirement.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in