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All About Annuities » Annuities fall out of favour, but still offer certainty

Annuities fall out of favour, but still offer certainty

Annuities fall out of favour, but still offer certainty
News from Financial Times:

©Chris Batson

For those who value the prospect of a good night’s sleep in retirement, an annuity is the only financial product that will offer the certainty of a secure income in later life.

Money saved in a pension plan is given to an insurer, who turns the lump sum into a guaranteed lifetime income for the policyholder and any spouses attached to the contract.

The concept of paying out a flow, or stream, of income to a person or even a family dates from the Roman empire. The annuity concept has survived throughout the centuries and, today, an estimated 6m policies are providing a regular income to retirees throughout the UK.

But in spite of the peace of mind the policies can offer, annuities have fallen out of favour.

The first quarter of this year saw a dramatic drop in annuity sales, with only 20,000 policies taken out compared with 70,000 the same time a year ago, according to the Association of British Insurers (ABI), the trade body.

This development followed

… Read the full article


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