Annuity rates ‘have gone into freefall’: Money-printing triggers slump - and it may g

coastline

I read the other day over 50% of households would be mortgage free by 2015...
The chart below gives an indication of where we might have been if it weren't for the banking crisis..

System

purch wrote: »

However, for those requiring to buy an Annuity, the return is locked in on purchase (no investment return), and at current yields they do not look particularly attractive.
.

Yes, but Michaels' argument is that whether they wait or buy now makes no difference, because if they wait and annuity rates fall, it won't matter because their pot will go up correspondingly in value, so will buy just the same return on an annuity.
This argument is hard to reconcile with anecdotal experience and most IFAs' advice.

Eellogofusciouhipoppokunu

purch wrote: »

You won't get any of those.

So far this thread has revealed that, "many are drowning in debt", that raising base rate to 5% would "cause a meltdown in the banking industry", and that "Most people have mortgages" or on the other hand "Most people don't have mortgages"

........such is the MSE Forum World :eek:

You could provide absolute proof that the current BoE rate is at 0.5% for reasons other than to prop up house prices and 5 threads later the same people will be rolling out the same discredited arguments. It's like Groundhog day on here.

System

Gracchus_Babeuf wrote: »

You forget that an annuity is not compulsory until you reach age 75. You can drawdown from your pension fund until then, and then there is the 25% tax free amount as well.

I think that rule has changed. There is no obligation to buy an annuity at any age.

The 25% tax free amount is taken at commencement, not "and then".

michaels

Clifford_Pope wrote: »

Yes, but Michaels' argument is that whether they wait or buy now makes no difference, because if they wait and annuity rates fall, it won't matter because their pot will go up correspondingly in value, so will buy just the same return on an annuity.
This argument is hard to reconcile with anecdotal experience and most IFAs' advice.

Well ceteris paribus, for a fund invested in guilty etc. Of course increasing life expectancy is hardly a minor factor

Conrad

This is why I've always urged people not to invest in pensions as you can end up being over a barrel having to purchase an annuity at less than ideal returns. I addition there are other rules and procedures that in end may be less than ideal and do not confer sufficient control on the pension holder.

Use ISA's, property and such like so that you have control over what you do with your nest egg one day and you get to leave it all to your children without question.