07 May 2008
Figures from Hargreaves Lansdown have shown that annuity rates
have reached a five-year high. This is because of a rise in yields
on corporate bonds amid fears that inflation will climb in the
second half of this year.
A male worker with pension savings of £100,000 who retires
at 65 can purchase an annuity of £7,660 a year, compared with
£6,920 in March 2006. This 11% increase is despite the rise
in life expectancy which has made it more expensive to provide
annual retirement income.
