Delays cost pensioners up to £5000

Delays in taking out an annuity could be costing pensioners up to £5,000 in income, it was reported in the papers last weekend.  Annuity rates have fallen by around 3% over the last two months, with an average £100,000 fund now generating £6,624 a year compared with £6,831 – an annual loss of £207 which adds up to £5,000 over 25 years. Despite falls in the FTSE 100, experts have warned that falling annuity rates pose the biggest risk. We agree that people should be concerned about market movements as they approach retirement and should really move their money into cash to avoid the effect of market falls, but they should also be concentrating on annuity rates and getting the best deal possible.

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