Expect an Income for Life … for Longer Says Legal & General

LONDON, April 24, 2012 /PRNewswire/ --

The benefits of pension annuities

As average life expectancy of men and women in the UK continues to rise, more people are finding that they're having to fund for a longer retirement. And with average pension savings of around £33,000 having to stretch an extra two or three years than it did just 10 years ago, an annuity is definitely worth considering.  

Pension annuities (or 'annuities') convert these pension savings into a regular pension income. They have traditionally proved attractive to some 300,000 retirees each year, offering them the peace of mind of an income for life. But with annuity rates and incomes having fallen in recent years are they still good value?

Tim Gosden, Head of Annuity Product Development at Legal & General believes that there's significant value in the guarantees and certainty offered by a pension annuity;

"When deciding how much income they can offer, annuity providers take into account how long they expect to pay this income. The trend of increasing life expectancy has contributed to a reduction to the incomes offered to those in good health when they buy their annuity. This is because it's expected that incomes will be paid for longer.

We're finding that people are rightly starting to re-evaluate their own life expectancy. None of us know how long we'll live but in all probability, if we retire at 65 most of us will spend upwards of 18 years in retirement. A pension annuity will provide an income for life, however long, so it's probably more appropriate to see it as an insurance against the costs of living longer than expected, rather than as an investment. In terms of peace of mind, annuities represent very good value.

An income for life that won't fall is still a very attractive proposition, particularly when someone qualifies for extra income based on their health. Some annuity providers like Legal & General offer enhanced annuities when certain health risks or medical conditions apply."

For more information on Legal & General's pension annuities please visit http://www.legalandgeneral.com/annuities/ or call 0800 048 2445 for a quote. We may record and monitor calls. Call charges will vary.

Note to readers and editors

This article is intended for consumers.

SOURCE Legal & General Annuities