A new report highlights retirees’ annuities ignorance. There is some evidence that retirement savers are in the dark over pension annuity payouts, with 20% of those planning to retire within the next five years admitting they have no idea of the annuity income they will receive. The research conducted by Metlife Europe Ltd also revealed that around 30% of personal pension savers are also unable to estimate how much a pension annuity will pay out.
Further, the reaearch revealed that around 18% of men aged 60 to 64 and women aged 55 to 59 believe their annual annuity income will be £9,000 or more with 3% expecting more than £15,000. MetLife has warned there is a growing gap between expectations of an annuity income in retirement and the real levels of gross annuity income savers will receive.
With the current stock market volatility and the worldwide financial uncertainty we are witnessing people can perhaps be excused for not knowing. However, the harsh reality is that people who expect their £100,000 pension fund to provide an income in excess of £9,000 are heading for severe disappointment and anyone expecting more than £15,000 from their annuity will have to radically alter their retirement plans.
What’s the conclusion here? Get real about your retirement annuity expectations.