Deflation and your pension annuity
Monday, December 22nd, 2008Should deflation hit us, it could wreak havoc with retirement plans, especially if the problem carries on for years. As prices on the high street fall, so will profits and the value of stock market investments.
As many individuals rely on shares to fund pension growth, therefore many savers will have their retirement plans thrown into turmoil. Falling share prices have already wiped nearly 25% off the average personal pension fund in the past twelve months.
Anyone getting close to retirement should consider locking into a pension annuity sooner rather than later to gain the benefit of existing annuity rates. Naturally this is a better move for you if your pension fund has not been decimated by the recent stock market turmoil we have witnessed. It is anticipated that pension annuity rates could well fall over the coming months.
If you can afford to, deferring taking your state pension could also help. You could increase your retirement income by 10.4 per cent for each year you defer taking your pension.
We’ve said it before, and we’ll say it again. Take advice and really get to grips with the opportunities open to you.

