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The last 20 years have seen significant changes to the options available for those retiring and taking benefits from pension schemes.  Typical levels of annuity income can be 40% of 1990 levels whilst at the same time life expectancy has improved by an average of 8 years for males aged 65.

Providers of income in retirement for pensioners have responded with a range of developments that offer choice, sometimes with added complexity.  To cut through the we’ve teamed up with DMP Financial to offer a guide – STOP before you buy an Annuity.  Download your free copy.

The facts

1.) Declining annuity rates

  • In 1990 a £100,000 pension pot would buy a pension of £15,640 per annum (15.64%)
  • In 2000 the same pot would have bought a pension of £9,120 per annum (9.12%)
  • In 2010 the pot would currently buy a pension of £6,270 per annum (6.27%)

(*figures based on a male aged 65, single life, source DMP financial )

2.) Life expectancy has increased dramatically

  • In 1981 a male age 65 expected to live to 79
  • Today he can expect to live to 87
  • Annuity providers annuity payments have increased 50% due to longer lives

3.) Improved choice of retirement options

  • Annuities have changed offering enhanced & impaired rates but once purchased you cannot changed/adapt.
  • Drawdown has brought true income flexibility, improved death benefits and tax efficiency but there is still market risk.
  • Flexible or variable annuities offer income certainty, improved death benefit, access to market growth while protecting against market drops.

Download our free STOP before you buy an Annuity Guide.

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