Annuity rates have fallen once more, lowering the retirement incomes of some private pension savers.
Investment, Life & Pensions Moneyfacts said that the average rate for a 65-year-old man hoping to convert his pension pot into a level without-guarantee annuity is 3.3 per cent lower than it was in September.
This also means that the male annuity rate has now dropped by 10.8 per cent over the past 12 months.
For women, these declines have been even steeper, with the average female retiree suffering a one-month drop of 3.6 per cent and an annual decline of 11 per cent.
Changing government bond prices, which influence annuity rates, are thought to be a key factor behind this trend.
Richard Eagling, editor of Investment, Life & Pensions Moneyfacts, commented: "Given that the stock market recovery has recently boosted the size of many pension pots, it is disappointing that falling annuity rates have had an adverse impact on the retirement income that can be achieved.
"Part of the problem is the low gilt yields that we are seeing, which are still well below last year’s levels."
Retirees disappointed with their pension income should consider using an equity release calculator.
The tool allows them to find out if they qualify for an equity release plan, through which they can unlock existing value held in their homes to generate an extra source of income.
Posted by Alison Stephenson
