Older workers should look to lock in some of the gains enjoyed by their pension plans following the stock market rally of recent months, an adviser has suggested.
New industry analysis from Hargreaves Lansdown suggested that many savers who were soon to retire should liquidate some of their share-based investments, in order to protect themselves against future market declines.
The FTSE 100 has risen by well over 40 per cent since March, due mainly to the general improvement in global economic conditions.
However, some analysts have suggested that these gains will not be sustained over the months to come, with the markets likely to fall again soon.
Nigel Callaghan at Hargreaves Lansdown commented: "Having the good sense to bank profits is an essential part of any investment strategy."
Taking out an annuity was also recommended by the report as a good move in the currenct climate.
Hargreaves Lansdown pointed out that annuity rates could fall in future, leaving retirees on smaller-than-expected incomes.
If this prediction proves correct, demand for equity release as a supplement to pensioner income could experience a subsequent increase.
The benchmark annuity rate for a 65-year-old male retiree fell below seven per cent during October 2009, the first time that this has occurred in two years.
Posted by Alison Stephenson
