01 June 2009
Investors nearing retirement are being encouraged when it comes
to buying an annuity, as financial advisers claim that recent gains
on the stock market are helping pension funds to recover.
Many retirees have been delaying buying an annuity due to
pension fund losses, opting to live on money stored in bank
accounts instead.
Aon Consulting recently reported that defined contribution (DC)
schemes have risen in value by 10% over the last month, although DC
pension funds are still 32% lower than they were in September
2007.
Helen Dowsey of Aon Consulting said: "Members have got difficult
decisions to make if they're approaching retirement now. We don't
know how long the markets will take to recover and what will happen
with annuity rates."
