Annuities 'down but not out'

Private wealth held in annuities may have slumped in value during the recession but their time might not be over quite yet, in the opinion of one commentator.

Even though there are signs of economic recovery, annuities continue to struggle and the situation could be about to get even worse with new European Union regulation, Money Marketing personal finance editor Paul Farrow said.

However, Mr Farrow went on to explain how some experts have highlighted annuities may well have been a shrewd investment, evidenced by their relatively good performance in the face of long-term low interest rates.

He said many independent financial advisers welcomed the government legislation earlier this year to abolish compulsory annuities, arguing flexibility is the key to preparing successfully for retirement.

Earlier this month, the coalition government ruled that from April 2011, people will no longer be forced to purchase an annuity by the age of 75.
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