Low interest rates and a ‘lost decade’ in the stock market are forcing more pensioners to take higher degrees of risk to obtain an acceptable retirement income. Sales of “variable annuities” have increased by more than a third over the last year, despite experts warning of the risks involved, as pensioners shun conventional guaranteed annuities, where returns have fallen by a fifth over the last decade to stand at one third of their level 20 years ago.

A toxic mixture of apathy and annuity mis-selling is costing pensioners thousands of pounds every year, experts are warning. More than 60% of retirees simply clock off from work for the last time, take one look at their pension statement and sign up on the dotted line. It means about 270,000 pensioners every year run the risk of sacrificing crucial income in retirement, either through apathy or because they've been given duff advice. Instead, they should be shopping around for the best annuity - the insurance product that converts your pension pot into a lifetime income. Providers can vary by 20% - 30% in the rates they offer on annuities.

If you would like these charts in a different format please contact me.

Since my last annuity update at the beginning of June, annuity rates have continued their slide downwards.

Financial Secretary to the Treasury, Mark Hoban has announced the start of an 8-week consultation on removing the effective requirement to annuitise by age 75, although this age was raised to 77 in last month's Budget. We discuss the proposals with Financial Secretary to the Treasury, Mark Hoban and Billy Burrows from Burrows & Cummins Annuities.

I attended the meeting at HM Treasury on 15th July for the launch of the consultation on ending the effective obligation to purchase an annuity at age 75. Many in the industry, including myself had been campaigning for many years for this and following the announcement in the June budget that annuity compulsion was to be axed in April 2011 we have eagerly awaited the detail. We got that detail yesterday and first impressions are that the Government has gone further than expected and is planning to allow more flexibility than initially anticipated. This is very good for news for everybody who is retiring with a money purchase pension plan.

Welcome to the Summer 2010 issue of Secure & Well, the newsletter which forms part of the Burrows & Cummins Secure & Well Service.

Another very good article looking at the effects of postcode annuities

The Government has just announced that it will end the existing rules that create an effective obligation to purchase an annuity by age 75 from April 2011. A consultation on the detail of this change will be launched shortly. Legislation for transitional arrangements will be in the Finance Bill after the Budget for those yet to secure an income who will reach 75 in the meantime.

As those retiring face dwindling incomes, we look at investment options that could help maximise your money.