Quantitative easing measures, due to be introduced by the Bank of England today, will prove damaging to those approaching retirement, according to annuity providers.
Government bond yields have fallen sharply on news the Treasury has given the go-ahead for a £75bn first round of quantitative easing, and this is expected to have a knock-on effect on annuity rates. The Bank of England will begin its first £2bn auction today to buy long-dated gilts, in order to inject money into the British economy. However, while gilt prices have soared due to the Government's actions, yields are expected to fall, which is a major factor in the rates annuities pay out. Phil Naylor, managing director of annuities at Legal & General, comments:"Quantitative easing is a...
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