Savers suffer but annuities remain high

Comment from Craig Fazzini-Jones - Director and Head of MGM Advantage Designs for Retirement: The latest interest rate cut is sure to increase the anxiety about savings and investments, but for those considering retirement right now, here's what they need to know:

Whereas typical savings rates now stand at about 3%, annuity rates remain as high as 7% - even higher for those with health conditions. While savings rates may fall further after the latest rate cut, now is a good time to consider an annuity, particularly as once an annuity rate is fixed it's guaranteed for life. For pensioners, this guarantee can provide remarkable peace of mind in very uncertain times.

The reason annuity rates remain relatively high compared to savings rates is that annuities are linked to corporate bond rates as well as interest rates, and corporate bond rates are currently high.

While annuity rates are certainly favourable, it's still crucial for pensioners to shop around for the best deal, as rates can vary greatly between providers. This holds true for any savings or investment product.

The most important thing to do is talk to an independent financial adviser who can help pensioners get the most from their money by taking individual circumstances into account.