ANNUITY rates are at an all-time low, which is bad news if you are heading for retirement, reported The Herald recently.

Many people have relied on an annuity but remain unaware that over recent years the rates have consistently fallen.

Billy Burrows, director of Better Retirement Group, says: “Annuity rates have been falling almost continuously since 1990. Back then, the annuity rate for a 65-year-old man was more than 15.5%; today it is less than 6.5%, a fall in excess of 50%. In August, annuity income fell by more than £300 a year, or 5%, making this the largest monthly fall on record.”

Keeping up to date with changes in rates and balancing a mix of pension products is key to ensuring a healthy income and return on your investment come retirement.  It can be confusing to navigate the technical jargon often whipped out and this can be intimidating to people seeking advice. Chris Ness, Pensions Planner at Morton Fraser advises:

“Annuities still have a role to play in retirement planning, but other options should also be considered, depending on circumstances and other sources of income. An annuity offers a secure income stream, which often clients need in retirement to complement other more variable income sources such as investment or rental. Ultimately, point of retirement planning is extremely important and therefore the best thing to do is ensure that you seek regular advice in the run up to retirement. “