Annuities 'last for a lifetime'

Annuities make good investments because they last a lifetime, an expert has claimed.

According to Fiona Tait, writing for the Financial Times, pensioners should not be deterred from making the alternative investment because of falling rates and dwindling pension funds.

"There is no doubt this will cause short term problems for some individuals but is there some good that could come of it?" she asked.

"Annuities are for life. The key upside of a conventional annuity is that it does not run out."

Moreover, considering economic conditions are unpredictable, it might be best for pensioners to invest sooner rather than later, although Ms Tait did point out that waiting could mean rates increase.

However, anyone hoping to make gains in the short-term is unlikely to receive much of a payout.

She said: "I'm afraid there's no good news for those who need the maximum short term income from their pension plan. However there is some potential good news for those who can wait.

"Not because of improving interest rates, but because annuities are for life."

Meanwhile, Dr Ros Altmann, Director-General of Saga, advised retirees to use equity release to fund their care if they have no savings funds.

Posted by Liam Tomlinson