KRS responds to ILC report which concludes that annuities offer "Fair value for money"
25 July 2014
Key Retirement Solutions welcomes the report from the International Longevity Centre, presenting the research by Jonquil Lowe from the Open University Business School. The research takes a long hard look at the value of annuities, and importantly the value of the transfer of the longevity risk (living too long) being taken by the insurer.
The report shines a light on the drivers of annuity rates and the fact that under the new pensions freedoms, including the guidance to be offered to all, that the risk of "living too long" must not be side-lined but needs to be integral to everyone's retirement income planning.
Billy Burrows, associate director at Key, said: "The choice for all at retirement will be 'do I want to carry the longevity risk myself, or do I want to share or even eradicate the risk with an insurer?'
"The paper rightly points out that annuities provide a valuable insurance that consumers will not live too long and outlive their pension savings and that there is no other financial product that provides a guaranteed lifetime income. The grass may look greener with the new freedom but a lack of focus on life expectancy and living too long means that there is a real risk that many may run out of money in the future."