Rising interest rates are not necessarily a strong-enough reason to delay purchasing an annuity because the opportunity cost of delay can often heavily outweigh the marginal benefits of slightly better gross income.
So says Chartwell Investment Management, pointing to recent examples of how this would work in practice. For example, a male aged 65 with a fund of £50,000 after tax free cash has been taken could have secured a gross annual annuity income with Pru of £3,747.12 on 25 March this year, Chartwell says. Three months later, the same person would have secured gross annual income of £3748.44. However, the opportunity cost of securing that additional £1.32 per annum was £312.26 per each of the three months in which annuity income was not taken, or a total of £935.46. ”Taking benefits at...
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