QE is 'hitting pension savers hard'

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QE is 'hitting pension savers hard'

Thu 24th Nov 2011

The Bank of England's quantitative easing (QE) programme is having a detrimental impact on pension savers across the country, it has been claimed.

Dr Ros Altmann, director-general of Saga, told listeners to the FT Money podcast that the impact on gilts is something that policymakers have completely overlooked and this, in turn, is forcing down annuity rates.

She commented: "Because annuities are priced relative to gilt yields that means that anyone coming up for retirement wanting to buy an annuity has suddenly found that their lifetime income has been significantly reduced."

Dr Altmann added QE is supposed to be a temporary policy to stimulate the economy, but it has now been in effect for more than two years.

According to a report recently published by the European Insurance and Occupational Pensions Authority, the organisation aims to clarify best practices for the sale and marketing of annuities across the eurozone in the coming months.

Chairman Gabriel Bernardino noted it will link work in consumer protection with financial innovation to ensure people are getting the best and fairest deals.

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