Pensioners or retirees have a keen interest in calculating their savings and the performances of their funds. And it is certainly of prime importance for them. The performance of the pension fund and annuity income is the most essential aspects of retirement savings. So what’s the news of the first quarter of 2019?
Pension Fund and Annuity Income
The retirement savers have a mixed bag of fortunes as the pension funds made a strong recovery but it was not the same with annuity rates in the UK. Let us discuss these two biggest parameters:
- Pension fund: These are the investment pools which take care of the employee after retirement. They are accumulated from employer or employee contributions or both. The pension plans invested looks after the person once the person retires.
- Annuity Income: Also known as an immediate annuity; the income generally initiates as soon as the policy is done. The people retired or about to retire purchase policy with a lump sum payment or premium and will receive fixed or variable income. The annuities pay out until annuitant’s death and many payouts till the death of a spouse. Choosing the right annuity is always vital for later life.
How did they perform?
There is good news for UK retirees as the pension funds made a great recovery in the first quarter of 2019. There were major losses for the retirees in the past couple of years. The biggest losses were faced by them in 2018 and the average pension fund in the initial three months increased to 6.7%. This is the strongest performance since Q3 of the year 2016. On the other hand, annuity income decreased in comparison to the previous year. The first quarterly saw a decrease of 1.4%; this is for those with average annual standard level without guarantee. Those with higher purchases had to face a decline of 1.8%. The standard annuity level has been considered lowest since Q3 2017.
First Quarter 2019
The first three months of 2019 saw an overall increase in the retirement incomes when compared to the previous quarters. The increase can be ascertained to 3.9% when calculated on the basis of 20 year period and retiring at the age of 65 and contributing 100 gross per month. The driving force behind it is mainly stronger pension fund recovery. When comparing average retirement incomes with a decade ago, one will be surprised that the average is lower. The government is keen on taking steps to introduce new legislation such that the schemes of pension perform better.
Therefore, the annuity incomes were not the positive side but the pension funds added to the happiness of the retirees to a certain extent. Whenever a person retired or about to retire chooses an annuity plan; it is recommended that he/she speaks with an annuity broker. Explain individual requirements and the circumstances, the broker will certainly help in getting the most suitable annuity income plan. Individual financial advisers are available for clearing any doubts of the pensioners. So choose the right annuity for your future.