Annuities could get boost from interest rate rise - Hargreaves

Annuity rates hit two-year high

Julia Bahr
clock • 2 min read

The Bank of England will meet to discuss interest rates tomorrow (Nov 4) with any potantial increase resulting in more attractive annuity rates.

If interest rates rise, annuity rates could rise further and make them more attractive to current retirees, Hargreaves Lansdown said. Pension savers could also be affected as rates for those transferring their pension may be lower as a result of an interest rate increase. Providers use government bonds to provide annuity income, the firm explained. "When interest rates are low, lots of investors pile into these bonds because the return on cash is so low, so the price of government bonds rises. Given that they produce a fixed income, the income as a proportion of the price falls, which is...

To continue reading this article...

Join Professional Adviser

  • Unlimited access to real-time news, industry insights and market intelligence.
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters.
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection.
  • Members-only access to the editor’s weekly Friday commentary
  • 
 Be the first to hear about our events and awards programmes.

Join

 

Already a Professional Adviser member?

Login

More on Retirement

Retirement worrying majority of people, survey shows

Retirement worrying majority of people, survey shows

Most have not spoken with an adviser during the cost of living crisis

Alex Sebastian
clock 02 March 2023 • 1 min read
State pension age hikes: Retirement affordability advice needed

State pension age hikes: Retirement affordability advice needed

State pension age is currently 66 with two further increases due

Adrian Boulding
clock 16 February 2023 • 7 min read
'Worrying' gender divide when it comes to retirement regrets

'Worrying' gender divide when it comes to retirement regrets

Nearly four-in-ten women had regrets about their retirement decisions

Ayesha Venkataraman
clock 31 January 2023 • 2 min read