Solvency II could cut annuity rates 20% - Deloitte

The firm explained Solvency II rules, designed to align the treatment of insurance across Europe, would force annuity providers to hold significantly more reserves and move from investing in corporate bonds to lower-yielding assets. It said the best case scenario would see annuity rates fall by 5%, however, it warned they could fall by up to 20%. For a pensioner with a £100,000 pension fund, these changes could reduce their income by between £300 and £1,100 a year. Richard Baddon, insurance partner at Deloitte, said: "There has been a great deal of technical debate and negotiation wit...