Annuity Rate Trends

Annuity Rates- Once you have decided annuities are right for you, you should not put off converting your pension fund into an income.

  • The general trend in annuity rates in the uk has been downwards over the last ten years. Rates have been adversely affected by the fact that people are living longer. Consequently insurance companies are reducing their rates.
  • By taking the annuity now you start generating income. If you delay for a year, you lose out on a whole year's worth of valuable income. If the value of your pension fund should fall during this year, not only would you lose out on this income, but you would also have a smaller fund to buy your annuity. Even allowing for growth on your Pension Fund and the fact that, assuming all the circumstances remain the same, the older you are the higher annuity rate you could obtain, you may not get a chance to catch up on the total income you would have received by taking the annuity earlier.
  • Buying your annuity now means that you lock into today's annuity rates. Once set up your annuity cannot be reduced.