Maybe now is the time to be preparing your personal finances for a stockmarket recovery. Maybe you should look to get your pension fund investments back on track ready to buy your annuity with. It is possible that an economic recovery may have unwelcome financial consequences for some if they have not pre-empted the likely changes.
Keeping your personal finances in order throughout the current turbulent economic times we are witnessing has been all about battening down the hatches and limiting your exposure. However, in recent weeks we have seen a lot more positive news coming from economists and industry. Even the Confederation of British Industry (CBI), the employers’ organisation, sharply upgraded its own growth forecast recently, and maybe there are signs of economic green shoots, but not everyone agrees with the CBI on the time frame. Certainly not when you consider that public borrowing hit a record £19.9 bn in May.
Those approaching their retirement may wonder if their battered pension fund might benefit from more time to recover from their falls, and may be debating whether to wait to buy a pension annuity to provide lifetime income, or considering a more flexible product like income drawdown that allows some money to stay invested. Interestingly, though, it is not usually wise to delay buying a pension annuity.
There are some quite opposing views about the current economic situation, and retirees should be very careful not to end up in a worse position than they are in currently, particularly if the so-called economic recovery turns out to be “W” shaped, with yet another dip in equity values. Those coming up to their retirement should be very wary of gambling their pensions on a short-term market recovery, and a one-year time frame is certainly not an appropriate one for stockmarket risk. Then we have annuity rates to consider, and at the moment they aren’t heading in the right direction, but might they in the future?