Quantitative Easing Impacting on Pensions

It has been suggested that the Bank of England’s quantitative easing programme is having a negative affect on pensions’ incomes and leaving new retirees thousands of pounds worse off.

Ahead of an expected announcement later today (July 5th), economists have warned that UK pension annuity rates have been in meltdown for the past five years.

Economists have suggested that a man with £100,000 in July 2008 would have been able to secure an income of £7,855 whereas his younger brother, who hits pension age today, would only be able to secure an income of £5,743 – a drop of twenty-seven percent.

It is claimed that quantitative easing has dramatically reduce the yield on government bonds, to which annuity rates are linked and therefore have forced those who are newly retired to buy annuity which will pay out significantly less than it previously would have done.

For those who are concerned about how the additional quantitative easing programme announced earlier this week will influence their future pensions and want input on how they can still maximise their pension income our team here at Milsted Langdon can assist.

Steve Horton is a Chartered Accountant and a Chartered Financial Planner and specialises in helping clients to manage their pensions and investments

Posted in Blog.