But a new -10% drop in annuity rates looks likely for new UK male pensioners - if they don't act smartly.
According to the Moneyfacts Treasury Report, the on-going effects of more quantative easing and historic all-time-low interest rates have decimated pension annuities for many this year (and last). In the last quarter, it's estimated average annuity incomes slid a further -4.1% for a a 65-year-old male and close to -5% for a 65-year old female.
Christmas annuity crusher
But a new killer cut looms. This is the European Gender directive, which comes into place just before Christmas and promises to crush annuity rates for healthy, newly-retired men by as much as -10%. Perhaps even more.
Slashed again"Conservative estimates reckon a cut of 5-10% for annuity rates," warns pensions expert Laith Khalaf from pensions expert Hargreaves Lansdown. "The Treasury actually came up with an estimate of beyond 10%. You should start doing something now about it now if you're retiring in the next three to four months as you will need to allow time for annuity money to transfer."
The Telegraph claims that three and a half years ago, three annuities were sold for every four people turning 65. "Now the figure is just one in two. As a result, almost a million potential annuity buyers have become 'annuity refuseniks' since 2009."
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Realistically, annuity rates are only likely to rise when Bank of England interest rates start to climb again. But that could still be some time off. There's also increased pressure on the regulatory front pushing insurers and pension funds into safer gilts, which usually offer lower returns.
That means it's even more important to shop around. You only get once chance to buy your annuity.