Annuity purchase: Timing is key

clock

David Trenner discusses the importance of adopting a phased strategy when moving from income drawdown to annuities.

The gilt yield in December 2011 was at its lowest ever level. The rounded down figure used to calculate maximum drawdown income using Government Actuary's Department tables is just 2.5%, and having only calculated rates for yields below 5% in 2006, the Government Actuary could be looking at a further calculation soon, as their minimum rate assumes gilt yields of 2%. So, why would anyone want to buy an annuity now? It is important to understand what an annuity does to answer that question. An annuity insures the policyholder against outliving his or her income. Henry Allingham, who die...

To continue reading this article...

Join Professional Adviser for free

  • 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 uncategorised

Building Society-owned Newcastle Financial Advisers acquires Openwork firm

First of a number of acquisitions

Hannah Godfrey
clock 09 December 2019 • 1 min read

Bond managers fear hedges being undermined as liquidity dries up

The recent sell off in the bond market and growing liquidity issues have forced bond investors to use similar hedging techniques, undermining their effectiveness and causing concerns about how much downside protection funds really have.

Anna Fedorova
clock 03 July 2013 •

Police launch investigation into mortgage middleman fined £1m

West Midlands Police have launched a fraud investigation into a Birmingham financier over his role in sale and rent back agreements.

clock 25 June 2013 •