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 2019
  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 £4,273 £4,019  
  60 £4,695 £4,418  
  65 £5,361 £4,913  
  70 £6,172 £5,708  
£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:

Enhanced annuity rates down 3%
Enhanced annuity rates down Enhanced annuities reduce by -3.31% as gilt yields fall by 28 basis points
Annuity fall with Brexit uncertainty
nnuities fall after Brexit uncertainty Brexit uncertainty sends investors to safety of gilts lowering yields and annuities
UK annuities could rise with higher yields
UK annuities fall Yields rise by 18 basis points after improved prospect of US and China trade deal
Gilt yields rise and Trump delays tariff
Gilt yields rise as Trump delays tariffs

Donald Trump delays $200 billion of tariffs on Chinese goods pushing up yields

Retirement income up with equity rally
Retirement income recovers

Retirement income is up 7.5% benefiting from January rally of US stocks

  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©2001-19 All Rights Reserved