According to recent reports in the press, annuity rates are at an all time low. In fact they are so low, you would have to live to 90 to get value for money. And low interest rates and rising life expectancy are pushing rates down even further.

The BBC reported that a man aged 65 living with £30,000 to invest in an annuity would receive £1,719 a year gross for their rest of his life. Put another way, after 17 and a half years the original will have been paid back, so if he had died before then he would have lost out financially.

Compare that with The House Crowd where you would get £2,250 for the rest of your life (with our income only product). That’s a whopping 30% more PLUS you still have your original £30,000 capital which can be accessed when you like or passed on to your heirs (unlike with an annuity which will stay with the insurance company).

And yet, amazingly, pension companies promote themselves as being low risk. I wholeheartedly agree with former Downing Street pensions adviser Ros Altmann who stated that pensioners are not properly warned about the risks involved in buying annuities. She added  ‘If you buy a financial product that can lose more than three quarters of your money, it would usually be considered “high risk” – and those selling it to you would surely have to give you a proper risk warning.’

‘Pensioners take ‘the biggest gamble’ of their lives when they buy an annuity to provide for their retirement. They would have to live until the age of 90 before their annuity became ‘good value’, warned Altmann.

Where we disagree with her is when she said:  ‘Most pensioners, have little option but to buy an annuity if they want a guaranteed income in retirement, will lose much of their nest egg if they die young, become ill or if inflation rises…’ We know people do have an option, but she clearly hasn’t heard about The House Crowd.