Should I buy an annuity now rates top 7%?

• Rising interest rates will allow annuity companies to offer lucrative deals again
• Survey reveals many savers are skeptical or apprehensive
• Pension freedom encouraged most savers to keep investing their money

People over the age of 50 remain skeptical about their pensions, even though pension benefits have recently picked up after years of stagnation, a new study finds.

One in five considers products with guaranteed income for life to be of low value.

About 44% of seniors surveyed believe their pensions are rigid, and 45% believe they are dangerous if they die prematurely, according to a Canada Life survey.

Annuities have long been shunned due to low interest rates, harsh conditions and widespread notoriety due to fraudulent marketing scandals.

Pension liberalization reforms in 2015 forced most savers to continue to invest their money and live only on withdrawals.

But the recent series of interest rate hikes has given annuity companies more leeway to fund more attractive deals, prompting a rebound in sales.

With £100,000, a healthy 65-year-old can now buy around £7,170 in retirement benefits per year. With no inflation protection and a 5-year warranty, you can protect your cash right after your purchase. The interest rate is almost 7.2%. .

According to Hargreaves Lansdowne’s latest industry average, the same person with a spouse three years younger can buy an inflation-protected joint life annuity for the same amount, but there is no guarantee that it will provide £4,720 a year. It says.

Canada Life said in a spring survey of about 1,000 people over the age of 50 that there are “common misconceptions” about pensions.

Pension rates have risen nearly 50% in the past 18 months to their highest level in 14 years, insurers said.

In addition, the pension is flexible, and there is also a “retirement account” version that allows you to turn your income on and off.

If you’re worried about dying earlier than expected and losing your purchase funds, you can purchase security and value protection to ensure your income is paid to your designated recipients, according to Canada Life.

The company said the survey also revealed a “real lack of awareness and understanding beyond misunderstanding.” This is because a significant number of people who say they know a lot about pensions do not agree, disagree, or think anything about their value or offering. Flexibility.

The pension liberalization reform eight years ago encouraged most savers to keep their money invested, which includes portfolio monitoring and exposure to financial market risks.

This is a money guide that explains how to invest in annuities, compare investment and withdrawal plans and annuities, and how to combine annuity withdrawals and annuities.

“Pensions tend to be sold more than bought,” says Nick Flynn, director of retirement income. This situation is exacerbated by misconceptions that have built annuities as an outdated product. ”

But with significantly improved rates and a longer warranty period, which is essentially a money-back option, it’s worth a quick look, he said.