Pension Annuity rates rose 44% in 2022 to hit a 14-year High!
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Rates have risen by over 58% from historic low levels in December 2021.
Annuities are now an attractive option for those nearing retirement who prefer the security of a guaranteed income through retirement that will never fall. An annuity provides you with a steady income stream throughout your retirement years, ensuring you have a reliable source of income to cover your expenses.
IMPORTANT – get professional, qualified advice about your retirement options if you are planning to retire soon to make sure you are getting the best income and benefits in retirement.
Some key information on Pension Annuities includes:
- Annuity rates rose 44% last year to hit a 14-year high, thanks to soaring gilt yields, which have been turbo-charged by the Bank of England raising interest rates as it seeks to get inflation back under control.
- Last time annuity rates were at this level was during the 2007-2008 banking crisis.
- Rates have risen by over 58% from historic low levels in December 2021.
- The average annual annuity income has risen by nearly £700 over the past 12 months.
- The break-even point (the point at which you would receive your original pension back through income) has also been reduced by six years, falling from 22 years to 16 years.
- Annuities are an attractive option for those who prefer the security of the guaranteed income they provide through their retirement.
- Investment markets remain volatile, making returns from drawdown pensions uncertain. Annuities are an alternative for providing a retirement income that will never fall.
Once you purchase an annuity and lock in a rate, the income you receive is completely secure and will continue for the rest of your life, regardless of what happens in the stock market or the broader economy.
This means that even if you live to be 100 or beyond, you will still receive regular payments. However, it’s important to note that depending on how long you live after purchasing the annuity, you may receive less than what you originally paid into it.
Despite this, the annuity provides a reliable source of income that is not impacted by market fluctuations.
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A pensions annuity is a financial product that provides a steady stream of income in retirement. When you purchase an annuity, you give a lump sum to an insurance company, and in return, they provide you with a regular income for the rest of your life. Annuities can be tailored to your individual needs and circumstances, allowing you to choose the level of income, the duration of payments, and any other additional features.
An annuity is a popular choice for many people who are approaching retirement because it provides a guaranteed income for life, no matter how long you live. This can offer peace of mind and financial security, particularly if you do not have any other significant sources of retirement income. An annuity can also be a good option if you want to avoid the risks associated with investing in the stock market, as annuity payments are not subject to market fluctuations.
Choosing the right pensions annuity for your needs can be challenging, but our team of experts is here to help. We will guide you through the process and provide you with all the information you need to make an informed decision. We will take into account your age, health, lifestyle, and other factors to ensure that you get the best possible deal.
While an annuity can provide you with a reliable income stream, it’s important to remember that your needs and circumstances can change over time. For example, you might need more income to cover unexpected expenses or medical bills, or you might want to take advantage of new investment opportunities.
By getting a checkup on your annuity, you can make sure that it continues to meet your needs. You can review your current income stream, assess your current financial situation, and consider any changes that might be necessary. If your annuity is no longer meeting your needs, you might be able to make changes to it or even switch to a different type of annuity that better meets your needs.
There’s no set rule for how often you should get a checkup on your annuity, but it’s a good idea to do so regularly. You might want to review your annuity every year or every few years, depending on your personal circumstances. You should also review your annuity whenever there is a significant change in your life, such as a change in your health, a change in your financial situation, or a change in your retirement plans.