It pays to take a risk in retirement

Source: The Sunday Times

With rates so poor, experts advise looking for alternatives at retirement.

Few people would think about fixing their mortgages for two decades, but most of us still lock our retirement income into a fix for 20-plus years — even though the rates available offer appalling value for money.

Pension experts say it is now time for a radical rethink of how we fund retirement.

Annuity rates have been creeping up, rising 6% over the past three months and 12% since the start of the year. They are now at their highest level since 2011.

However, the payouts remain extremely poor. Someone retiring at 65 with a £100,000 pension fund can secure an income of just £6,252 a year, according to Hargreaves Lansdown, with some annuity providers paying far less. This will not increase with inflation, nor will it pay a pension to any surviving spouse.

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