Just this last week two of the annuity providers have announced cuts in their annuity rates. Is this now the time to buy your annuity? Liverpool Victoria reduced their rates by around 1.5% and Standard Life by an average of 2%.
There are changes in the capital adequacy rules that means annuity providers will have to put aside more funds to provide the capital adequacy and this is putting pressure on them to lower rates. The question is do you buy your annuity now or do you wait to see what happens?
Before you decide you should get independent financial advice from an annuity specialist.
At Just Retirement hosted “Choices in Retirement” Symposium, Mike Fuller, CEO of Just Retirement, said that despite a doubling of the enhanced annuity market from 9% in 2005 to 18% in 2009, only 36% of annuity clients take the Open Market Option (OMO).
Even worse – only 8% improve their retirement incomes by taking an enhanced annuity, despite estimates that over 40% of retirees could qualify.
To help people maximise their retirement incomes, Mike Fuller suggested three ways to increase the use of the OMO: improve communication throughout scheme membership; speed up service efficiency and streamline the application and advice process; to improve the customer outcome.
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