This year a record number reach retirement age but when they come to purchase an annuity, they are finding themselves locked into rates that will leave them out of pocket for the rest of their lives. Yesterday the outlook for this group became yet gloomier as the Bank of England poured another £50bn into quantitative easing (QE). That is because QE involves the Bank buying government bonds (gilts), which reduces their yields. Insurance companies use these yields to set the price of annuities. The latest cash injection from Threadneedle St brings the total QE stimulus to £325bn, the equivalent of around 20% of British GDP.
Economic policy iniquitous to savers and borrowers
PITY the babyboomers.
This year a record number reach retirement age but when they come to purchase an annuity, they are finding themselves locked into rates that will leave them out of pocket for the rest of their lives. Yesterday the outlook for this group became yet gloomier as the Bank of England poured another £50bn into quantitative easing (QE). That is because QE involves the Bank buying government bonds (gilts), which reduces their yields. Insurance companies use these yields to set the price of annuities. The latest cash injection from Threadneedle St brings the total QE stimulus to £325bn, the equivalent of around 20% of British GDP.
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Don't show me this again.