Should You Buy an Annuity at Retirement?

Annuities used to be the norm for retirees, but pension freedoms and rock-bottom interest rates have driven them firmly out of favour. Is an annuity ever the right choice? 

Faith Glasgow 15 February, 2021 | 9:22AM

pension

Annuities used to be the norm when it came to funding your retirement. Before the introduction of Pension Freedoms in 2015, around 90% of people without a company final salary scheme had no choice but to use their pension pot to buy an annuity when they reached retirement.

But under the new regime, pension savers can opt for other routes and annuities have become increasingly unpopular. This is in part because ultra-low interest rates means you need a sizeable pension pot to buy an annuity that’s going to deliver a decent income.

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About Author

Faith Glasgow  Faith Glasgow is a freelance journalist specialising in pensions and investment trusts

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