7,000 a year! Pensioners race to buy annuities as expert warns high rates wont last’ | Personal Finance | Finance [Video]

Experts are urging anybody who is keen to buy an annuity to act now as they can get up to £2,500 more income than just a couple of years ago. Yet this opportunity may not last for much longer.

An annuity is the guaranteed lifetime for income that retirees can buy with their pension savings, and until 2015, they were legally obliged to do so.

Sales collapsed overnight once that obligation was withdrawn under pension freedom reforms, as retirees rebelled against restrictive, poor value annuities.

Most now choose to leave their money invested via drawdown, which allows them to benefit from stock market growth and the flexibility to withdraw lump sums as required.

Drawdown has many benefits but there is also a danger of depleting your pot, something that will not happen with an annuity, as the income is guaranteed to continue for life, no matter how long you live.

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