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Annuities hit by record fall
ANNUITY incomes suffered their biggest fall in 14 years during 2012, according to data from Moneyfacts.
The average annuity crashed 11.5 per cent during 2012, the data showed, the biggest fall since 1998, when annuities collapsed 13.7 per cent. Fall after fall throughout the intervening 14 years means the average annuity income is now around 49.9 per cent lower than in 1997 – a mean annual fall of about 4.5 per cent.
Richard Eagling, head of pensions at Moneyfacts, blamed the poor results on the Bank of England’s quantitative easing policy, which is designed to reduce yields on gilts, combined with a flight to quality as the Eurozone is beset with debt crisis and uncertainty.