By Claire West
The prospects of securing a comfortable retirement have taken a further blow with news that pension annuity rates have hit an all time low.
Research from Investment Life & Pensions Moneyfacts has revealed that annuity rates have fallen steadily over the summer months following a spate of re-pricing activity amongst providers.
The average rate for a male aged 65 purchasing a level without guarantee annuity (based on a £10K purchase price) has decreased by 6.3 per cent since last August, whilst the equivalent female annuity has seen a 5.6 per cent reduction over the past year.
The latest reductions mean that the average male annuity rate has dropped by a massive 45.5 per cent over the last 15 years, whilst female rates haven fallen by 41.8 per cent
"With every passing month the outlook for those approaching retirement appears bleaker," commented Richard Eagling, Editor of Investment Life & Pensions Moneyfacts. "There has been a spate of annuity re-prices over the summer months which has unfortunately left rates at record lows. In a few months time the first baby boomers will hit retirement. Often perceived as the lucky generation, they are likely to face a rude awakening when they come to secure their retirement income via an annuity. With gilt yields still low and life expectancy increasing we can expect annuity rates to fall further still. Tomorrow's pensioners face a desperate battle to secure a comfortable retirement."