Hargreaves Lansdown: annuity rates will plummet

Nigel Callaghan, pensions analyst at Hargreaves Lansdown, believes that Government measures to inject liquidity into the market and kick start lending again will hopefully bring interest rates down. However, he said this will mean that in time, bond prices could jump, yields will drop back and this will bring downward pressure to bear on annuity rates. Callaghan added that rising longevity was also contributing to the decline in annuity rates, as it was forcing insurers to pay out on annuities for longer. He acknowledged that in the long term, the impact of sterling's decline and escal...