Should retirees buy an annuity?

There are many more options available to retirees than simply buying an annuity. Phil Oakley explains what to consider when choosing the best option for you.

How do you avoid running out of money when you retire? This is a question more and more investors need to ponder as our retirement options expand. In the past, most of us had to use our pension pots to buy an annuity (an income for life) from an insurer.

But in the last five years, annuity rates have plunged, and retirement income along with them. Many people are also reluctant to swap their pot for an annuity: if you die prematurely, your relatives won't get a penny of it.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.