27th June 2016
Annuity rates are already starting to fall, following the Referendum result and the drop in Gilt yields.
Just Retirement and Retirement Advantage have both announced annuity rate cuts this morning, more are likely to follow says Hargreaves Lansdown. Just Retirement’s rates are down by around 2%.
Investors who want to buy an annuity are being advised to act swiftly as rates look set to decline further.
Tom McPhail, head of retirement policy at Hargreaves Lansdown says: “Gilt yields and annuity rates have been dropping steadily over the past year. The events of the past couple of days have given new momentum to that trend. For any investor planning to buy an annuity in the immediate future, it may make sense to do so sooner rather than later. Once you’ve obtained a quote from an annuity company, the terms are usually guaranteed for between 2 and 4 weeks.
“As always, make sure you shop around for the most competitive terms for your personal circumstance before committing to a deal. If you want to delay purchasing an annuity, but need to draw on your pension savings, then look at drawing an income from your funds using a drawdown arrangement instead.”