Pension and annuity worries worsen as bank interest rates remain low. Seven in ten people who are nearing their retirement are now feeling more concerned about the income they will receive than they were just a year ago, research from leading enhanced annuity provider, LV=, has revealed.
The turbulent environment we are currently witnessing of low interest rates and poor job security has caused many people to have increased concerns over potential pension incomes as 51% of ‘near retirees’ said they are specifically disturbed by the reduced retirement income that their pension savings will buy them. It is not just low rates of interest on savings that are causing concern, it is also the fact that pension annuity rates are low.
Nevertheless, despite these increased concerns, just 21% of those aged over 50 have sought retirement advice from an independent financial adviser (IFA), while very few bother to shop around for better annuities or alternative retirement income options, such as equity release, and as a result of this survey, LV= has joined the decumulation action group that has been set up between industry experts to address the growing annuitisation crisis. Commenting on this move, their head of annuities, Matt Trott, stated that LV= fully support the new industry-wide management group formed to tackle this growing crisis, and that they will play an active role, both in sharing insights and ideas and in pushing for real solutions to the specific challenges identified.
In addition, the research found that a quarter of over 50′s are expecting to have to rely entirely on the basic state pension in their retirement, while almost half are actually expecting an income shortfall. In the meantime, as interest rates remain low, 61% of over 50s are concerned that their savings and investments are not growing sufficiently, and this rises higher to 82% among the over 65′s. Let’s just hope things improve when the time comes for you to check out annuity quotes for your retirement income.
