Rabu, 20 Juni 2012

Annuity values dive again: Annual income on £100,000 pension falls £200 in a month

Annuity values dive again: Annual income on £100,000 pension falls £200 in a month

By Dan Hyde

PUBLISHED: 08:26 EST, 20 June 2012 | UPDATED: 08:28 EST, 20 June 2012

Pension payouts have crashed £200 this month to hit an all-time low.

It is a blow to diligent savers nearing retirement. Experts warn another £300 a year will soon be scratched off payouts due to a big EU shake-up.

Nearly all major insurers have cut back the amount of money they offer retirees on each £100,000 in a pension pot.

Millions will see pensions slashed by up to 20% as new EU rules are set to send annuities plummeting

Millions will see pensions slashed by up to 20% as new EU rules are set to send annuities plummeting

Aviva, which offers the top rate to men aged 60, now pays just £5,340 a year, down from £5,540 last month, according to broker Alexander Forbes Annuity Bureau.

Hodge Life cut £97 off its payout on each £100,000, Canada Life shaved off £196, while LG cut £156 to offer just £5,181 a year.

Annuities, which turn a pension pot into income, have plummeted since paying nearer £17,000 a year on each £100,000 in the early 1990s.

Billy Burrows, an annuity expert at Better Retirement, says: 'Annuity returns are very near the bottom.

'Rates are so low you're only just getting your money back over a 20-year retirement.'

Experts dismissed as scaremongering speculation of new EU rules shaving another 20 per cent off annuity rates.

Brussels bureaucrats want British insurers â€" who sell annuities â€" to create bigger cash reserves. The idea is to create a safety buffer in case of economic crisis. But the extra costs will be passed on to customers.


d.hyde@dailymail.co.uk

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