• Home
  • Multi-Asset
  •  
    Retirement
    • Pensions
    • Income
    • Investment
    • Regulation
    • Estate planning
    • Equity release
  •  
    Your profession
    • Adviser tips
    • Business models
    • Companies
    • People
  • Regulation
  • Tax planning
  • Protection
  • Diversity
  • Events
  • Whitepapers
  • Industry blogs
  • EM and Asia spotlight
  • Newsletters
  • ESG spotlight
  • Sign in
  • Events
    • Upcoming events
      event logo
      Professional Adviser's Working Lunches in partnership with Orbis Investments - 2019

      Join us in March for the Professional Adviser Working Lunch series in partnership with Orbis Investments.

      • Date: 05 Mar 2019
      • Knutsford, Leeds, Surrey, Bristol
      event logo
      Professional Adviser Working Lunches 2019 - Baillie Gifford & First State Investments

      Professional Adviser is delighted to announce the launch of the new Working Lunches in partnership with Baillie Gifford and First State Investments. Travelling across the UK to provide valuable market insights for Senior Financial Advisers.

      • Date: 13 Mar 2019
      • Southhampton, Worcester, Durham, Norwich, Liverpool, Exeter, Sheffield, Leicester, Nottingham
      event logo
      Professional Adviser 360 2019

      The highly anticipated Professional Adviser 360 conference is taking place on 25th April 2019 at The Brewery in London.

      • Date: 25 Apr 2019
      • The Brewery Chiswell Street London EC1Y 4SD, London
      event logo
      Fund Manager of the Year Awards 2019

      The 2019 Fund Manager of the Year returns on Thursday 27th June 2019, Grosvenor House Hotel, London. Save the date.

      • Date: 27 Jun 2019
      • Grosvenor House Hotel 86-90 Park Lane Mayfair London W1K 7TN, London
      View all events
      Follow our events

      Sign up to receive email alerts about our events

      Sign up
  • Whitepapers
    • Find whitepapers
      Search by title or subject area
      View all whitepapers
  • Sign in
  •  
    •  

      Personalise your on site experience

      Download and use the apps

      Access your subscription from outside of the office

      Get relevant news and insight straight to your inbox

      Sign in
     
     
      • Newsletters
      • Account details
      • Contact support
      • Sign out
     
  • Follow us
    • RSS
    • Twitter
    • LinkedIn
    • Newsletters
    • YouTube
  • Register
  • Industry blogs
  • EM and Asia spotlight
  • ESG spotlight
Professional Adviser
Professional Adviser
  • Home
  • Multi-Asset
  • Retirement
  • Your profession
  • Regulation
  • Tax planning
  • Protection
  • Diversity
 
  •  

    Personalise your on site experience

    Download and use the apps

    Access your subscription from outside of the office

    Get relevant news and insight straight to your inbox

    Sign in
 
 
    • Newsletters
    • Account details
    • Contact support
    • Sign out
 
Professional Adviser

Delaying annuity purchase ‘not worthwhile' as rates unlikely to rise

tully-andrew
  • Jenna Towler
  • Jenna Towler
  • @PensionsJenPA
  • 28 August 2012
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
0 Comments

Retirees who delay buying an annuity for two years in the hope of rate rises are unlikely to ever recoup the money they would ‘lose out' on, a provider has warned.

MGM Advantage said gilt yields and annuity rates would remain low for the foreseeable future and delaying buying an annuity by two years could see retirees miss out on thousands.

It said a 65-year-old man with a £100,000 pot could buy a yearly income of £5,901 today. A 67-year-old man with the same pension could get a better income of £6,165.

By delaying annuity purchase he has increased his income by £264 a year - but he has also missed out on two years total income, equating to £11,802.

Related articles

  • Bruno Schroder passes away aged 86
  • Harlequin adviser Allan McRoberts's firm declared in default by FSCS
  • GAM fires suspended Haywood for 'gross misconduct'
  • Portafina 'considering legal options' after FOS sides with complainant

It would take about 44 years to recoup the lost money, while average life expectancy for a man aged 65 is 21 years in retirement.

Andrew Tully, pensions technical director, MGM Advantage said: "With annuity rates at an all-time low it could be very tempting to delay your purchase if you can afford to in the hope rates will recover. But all the signs indicate annuity rates will remain low in the short term - you would need a significant increase in rates, or a change in your circumstances like ill health, to make the wait worthwhile.

"With a huge choice of retirement options available, including investment linked-annuities for those who wish to take on some investment risk as a hedge against inflation, a financial adviser can help you maximise your retirement income.

"Shopping around for the best deal is crucial as simply accepting the rate offered by your pension provider could potentially leave you short changed by as much as 46% of your income. It could be the difference between a retirement worth working for and one where you struggle to make ends meet. It really is that simple."


The firm said its calculations did not take any further rate falls into account.

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Google plus  
  • Send to  
  • Topics
  • MGM
  • annuity rates

More news

Bruno Schroder was the great-great-grandson of company co-founder John Henry Schroder
  • Investment
Bruno Schroder passes away aged 86

Spent 56 years at Schroders

  • 21 February 2019
  • Companies
Harlequin adviser Allan McRoberts's firm declared in default by FSCS

Set up SIPPs

  • 21 February 2019
Tim Haywood
  • Investment
GAM fires suspended Haywood for 'gross misconduct'

Warns on profits

  • 21 February 2019
  • Pensions
Portafina 'considering legal options' after FOS sides with complainant

SIPP transfer

  • 21 February 2019
FCA fines Hargreave Hale and R&M over IPO misconduct scandal while Newton given immunity
  • Regulation
FCA fines Hargreave Hale and R&M over IPO conduct; Newton given immunity

Hargreave Hale seeking legal advice

  • 21 February 2019
Back to Top

Most read

Woman and apps
How online 'nudges' are encouraging women to invest
Abbie Knight
Abbie Knight: Get your business ready for the £5.5trn wealth transfer
Schroders and Lloyds unveil financial planning business
Quilter acquires 200 advisers in Charles Derby deal
Government launches mid-life MOT website
  • About Us
  • Contact Us
  • Marketing solutions
  • Terms and conditions
  • Privacy and Cookie policy
  • RSS
  • Twitter
  • LinkedIn
  • Newsletters
  • YouTube

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017