'Annuity rates must increase 6% to support delay'

Annuity rates would have to improve by at least 6 per cent over the next couple of years to make any delay in purchasing a retirement income worthwhile, MGM Advantage calculated.

 

The lost income from delaying your annuity purchase by two years could take between 37 and 41 years to recoup if annuity rates don’t improve, provider warns.

MGM Advantage has analysed whether it could pay to delay your annuity purchase in the hope that rates will continue to improve and you might increase your income in the future. 

Andrew Tully, pensions technical director of MGM Advantage, said: 'We have seen annuity rates improve over the first half of the year, from their historic lows in 2012, but the long-term outlook for rates is uncertain.'

To read the full article from FT Adviser, click here.