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Annuities hit by Brexit

Enable’s IFA’s in Bishops Stortford know the instability of Brexit will continue to impact on financial planning for some time.  And for those who are just retiring or are newly retired the amounts paid by annuity rates will be disappointing. Just Retirement and Retirement Advantage have both recently announced cuts to their annuity rates, and more companies are likely to follow.

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Annuities are available for retirees and are a product that offers an income for life, they are usually bought at retirement with all or part of a person’s pension savings.  At the moment annuity returns reflect the current direction of travel in interest rates, and since Brexit they are hitting even lower long-term rates.

“Gilt yields and annuity rates have been dropping steadily over the past year. The events of the past couple of days have given new momentum to that trend.” Says Tom McPhail of Hargreaves Lansdown, “For any investor planning to buy an annuity in the immediate future, it may make sense to do so sooner rather than later. Once you’ve obtained a quote from an annuity company the terms are usually guaranteed for between two and four weeks.”

But the other-side of falling annuity rates is the impact of lower interest rates on mortgages, more and more longer-term fixed-rate mortgages are likely to emerge reflecting falls in gilt yields. To review your pension or your mortgage you might want to talk it over with one of our experienced IFA’s at Enable.

Source: The guardian

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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