Annuity Rates, Annuities, Pensions, Divorce Annuity Rates Charts
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources

23 October 2012 last updated
Pension annuity income lower as market falls after poor US earnings

Annuity income from pensions reduces for those remaining invested before buying annuities as world markets fall with the US earnings from the third quarter disappointing resulting in significant falls on Wall Street and the FTSE.

Wall Street experienced falls with the Dow Jones index lower by 243 points or 1.8% at 13,103 and the FTSE-100 index lower by 85 points or 1.5% at 5,798.

Over the past week the FTSE-100 is down 2.0% and the Dow Jones down 3.2% and for those pensioners retiring with their pension still invested in equities means a lower income from their annuities.

Before retiring pensioners should convert their equity funds to cash to avoid any sudden fall in the value of their pension as markets can be volatile realising a lower annuity income. Usually it is not possible to delay retirement in the hope of a recovery as the income is need immediately.

Pension income lower as equities fall
  More annuity topics
  October News 2012
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Pensioners loose income for their lifetime

When pension annuities are purchased the pension fund is exchanged for an income and the annuity starting level is fixed for their lifetime. If equities fall this has an immediate impact on the annuity that can be purchased.

For example, if a male aged 65 with a fund of £100,000 purchased an annuity before equity markets decreased the income would be £5,664 pa. With a portfolio in UK and US equities reflecting the Dow Jones and FTSE-100 index the fund would reduce to £97,400 and the pension income would reduce to £5,516 pa or a fall of £148 pa assuming annuity rates remain the same. At age 65 the Office of National Statistics (ONS) would expect him to live for 17.6 years so over his lifetime the lost income would be £2,604.

The poor US earnings results adds to other worries about the global economy slowing including China and concern over Spain being able to meet the deficit cutting targets as their economy contracts. The Eurozone debt crisis is impacting the largest companies in America and it is likely that equity markets will react in a similar way to future information showing continued global slowdown.

Pensioners should make sure their funds are not significantly exposed to equity risk just before taking their benefits to avoid being left with lower annuities at retirement.

News related stories:
Pension annuity income and equities rise after fiscal cliff deal
Annuities income reduce as equities fall with fiscal cliff deadlock
Pension annuity income and markets lower with US fiscal cliff
Pension annuity income rises after Federal Reserve stimulus
Related internet links:
Reuters - Weak outlook Dow Jones worst day
Guardian - FTSE drops after poor US corporate news
Annuity Rates
  Age Single Joint  
  55 £4,574 £4,142  
  60 £4,961 £4,610  
  65 £5,691 £5,238  
  70 £6,478 £6,098  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
  Annuity Rates  
Annuity Quotes
  Plan your annuity and get quotes from the 12 leading providers  
  free annuity quote Free Annuity Quotes
  annuity quote no obligation No Obligation
  annuity quote all providers From All Providers
  Annuity Quote  
  Annuity Rates News:

Annuity rates rise due to inflation fears
Gilt yields rise over 2pc 15-year gilt yields are up 28 basis points as investors expect rise in base rates
Annuity rates soar 19pc to high for 6 years
Annuity rates soar19% Annuity rates reach a six year high up 19% since January 2021 as gilt yields rise
Gilt yields rise 20 basis points
Gilt yields rise 20 basis points Federal Reserve to raise rates more aggressively with gilt yields up to 1.82%
Annuities are at a 3 year high
Pension annuities could fall with Omicron variant Higher gilt yields sends annuities to a three year high up 11.1% in the last year
Pension annuities rise 9pc over a year
Pension annuities rise 9pc Pension annuities rise almost 9pc as yields increase ahead of higher base rates

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-22 All Rights Reserved