Many older people were disappointed not to hear a mention of the state pension within the key document yesterday. However, the Government did touch upon a number of other issues which could have bearings for pensioners.
One of these is the Financial Services and Markets Bill, which is taking action to remove EU regulation on financial services.
The move marks yet another step away from the union now Brexit is being actualised.
It is hoped the loosening of the regulation will have a positive impact for pension savers.
This could come in the form of a further boost to annuity rates.
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She continued: “Its introduction in the aftermath of the global financial crisis was designed to make sure insurers were well capitalised but was met with concern that it would depress annuity incomes.
“The ongoing Government review said reform could result in a material release of as much as 10 to 15 percent of the capital currently held by life insurers unlocking potential to invest billions of pounds in long-term assets.
“Such change could lead to a bounce in incomes which have already been on the rise in recent months as interest rates increase.”
Annuities provide a guaranteed income for life, and this is why they can often be popular for retirees.
While drawdown has surged in popularity, the rise of annuity rates may make the option more favourable once again.
Ms Morrissey added: “In April 2021 a £100,000 pension pot would get you a single life level annuity income of £4,882 a year. Now you could get an income closer to £5,700 per year.
“This is still some way off the highs seen before the global financial crisis, but further increases will make more people willing to consider them as part of their retirement income strategy.
“However, it’s worth pointing out that further rises are not guaranteed.”
With this in mind, individuals may wish to take different approaches when it comes to annuities.
Instead of purchasing one annuity at a certain point in time, Ms Morrissey has encouraged considering annualising in slices over time.
It would remove the pressure of taking an annuity all at once, and potentially avoid Britons missing out if rates were to increase again.
A pension pot would not be completely exposed to an annuity rate at a certain point in time with this option.
However, as is the case with all pension options, seeking advice is likely to be key.
This can be achieved through a financial adviser, the Government’s PensionWise service, or through assistance such as MoneyHelper or Citizens Advice.
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