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Annuity rates have halved in 15 years

Those looking to retire in the short to medium term in the UK will face a nightmare scenario with news that annuity rates have halved over the last 15 years. This unprecedented fall in annuity rates will have a direct impact upon the lifestyle and the finances of many in the UK who are coming up to retirement over the next few years. So what are the options?

Unfortunately the options for many future pensioners in the UK are limited to either working beyond their 60s and 70s or selling their family home and other assets to maintain their lifestyle. In reality we will see more and more UK pensioners fall into the poverty trap as the value of the UK state pension comes under more pressure and continues to fall in value in real terms. Those who had planned for their retirement 10, 20, 30 years ago with the impression that annuity rates would be double the rate they are today will be dismayed to find that their financial planning has now "gone out of the window".

It is impossible to underestimate the problems within the UK pension industry and the problems for those retiring in the short to medium term. There are also concerns regarding the long-term situation with many believing that the recent shift in the pension industry, and pension rates, is here to stay.

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