QE 'has negative impact on pensions'

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QE 'has negative impact on pensions'

Increasing levels of quantitative easing (QE) by the Bank of England have served to push down pensions for Brits, it has been claimed.

Tom McPhail, head of pensions research at Hargreaves Lansdown, said record numbers of people plan to retire this year and the fiscal policy of the Bank of England could be hindering the efforts of many to have a comfortable retirement.

"If the income that the insurance companies are getting from the bonds is falling because of QE, that has a direct impact on the amount of income they can pay to their customers through the annuity rate," he commented.

Indeed, Mr McPhail noted that in 2009, a 65-year-old male with a retirement pot of £100,000 would have received an annuity of £7,200, but in today's market, this figure has fallen to £5,900 - a drop of 20 per cent in just three years.

Yesterday (February 9th), the Bank of England announced it has held interest rates at their record-low levels for another month, while introducing an additional £50 billion of QE funding, bringing the total invested in this measure to £325 billion.

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