The latest round of quantitative easing (QE) from the Bank of England (BoE) is set to drive down annuity rates even further, hitting pensioners' incomes.
With an extra £50bn of QE announced yesterday in an attempt to stimulate the economy, further falls in gilt yields, which are linked to annuities, are expected. The QE programme now stands at £375bn and income offered to those approaching retirement has fallen by 20% in the past three years, the Financial Times reports. According to the paper, a 65-year-old man with a £100,000 pension pot could have secured an annuity income of £6,930 in March 2009 when QE was started. However, he would now be offered only £5,850.
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