The pension revolution rolls on. Next year more than five million retired people will be able to enjoy the new ‘pension freedoms’ and cash in their annuity.
I imagine the daytime TV ads are in the pipeline already, showing cheery pensioners completing the Daily Telegraph crossword in their new conservatory, or heading off into the sunset on a luxury cruise.
It’s not hard to see why many pensioners might be looking forward to this opportunity. Not because they want to waste their hard-earned savings on fripperies, but because many will be unhappy with the annuity they were forced to buy at retirement.
Until recently most people bought an annuity with their pension pot when they retired, which paid them an income for life.
But these annuities have looked pretty poor value for money in recent years, as increased life expectancy and rock-bottom interest rates have caused annuity rates to plunge.
To make matters worse, most simply took the standard annuity deal offered by their pension provider, rather than shopping around for the better-priced options.
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