29 Jun Kevin LeGrand comments in The Times on annuity rate cuts following Brexit

Consultant Kevin LeGrand comments in The Times in his role as President of the PMI following the announcement two leading insurers have cut their annuity rates due to the Brexit result. The cut, of around 2 per cent, come as gilt yields fall as investors have sought safe-haven assets.

Kevin provides advice on what people should do if they are looking to retire:

“No one can say currently whether the recent worsening of annuity rates is permanent, or whether they may improve any time soon. That is dependent upon wider financial criteria, which are driven by markets in response to the political situation — which is clearly wholly unpredictable at this time.

“What we can say is that if you buy an annuity now you are tying yourself to today’s terms for the rest of your retirement. That’s unless proposals currently with the government to allow annuities to be unscrambled in the future are adopted — but relying upon that would be a very risky strategy. If instead you adopt a drawdown strategy, you will retain some degree of flexibility that may help you to ride out the current period of uncertainty in the markets, if you have the confidence and ability to run such a strategy.”

Read the full article in The Times here.