If you are bold you will be measuring yourself, not for a suit but for an annuity, especially if you are over 55 and prepared to take a chance against the underwriters of the insurers.

An annuity is cheap to buy right now , because it is backed by fixed interest instruments that are cheaper for insurers to buy than for a long time.

Please note that these rates are  heritable (though a non heritable version is available) and level (though an indexed version can be bought  – at rather less than half the rate).

Whatever you do , is a big gamble. If you have people who are dependent and die with an annuity, imagine how they’ll feel if they find your annuity died with you. If you live a long time and have a level annuity, you will see your income fall behind the cost of living.

Yes you are getting certainty, but it may not be the certain outcome that you want! Most of all you are uncertain as to whether you could have got a better deal (for life) if you waited a little and got a better conversion rate (seeing the blue line on the graph go up again.

Since the Iran war started, income from a £100,000 level annuity has risen by around £100 to £6,300 a year, according to Legal & General (based on a 65-year-old male with a 50 per cent spouse’s pension), a relatively sharp move for annuities in such a short period of time. Over the past five years, the rises have been stark. In early 2021, comparative rates were just £3,800 annually.

This is of course what people find so distressing. How do you feel about profiting out of the misery of others. Please use the sharing tools found via the share button at the top or side of articles.

As the war in Iran has dragged on, so has the sell-off in UK government bonds. This week, yields on 10-year gilts briefly nudged 5 per cent, the highest in almost two decades, as fears of resurgent inflation return and hopes of interest rate cuts turn to expectations of rate rises.

Those who can afford to take a punt on an annuity are those who have money and have reason.

Many retirees have instead of annuities turned to income drawdown. Such plans allow holders to take an income directly from their pension pot and, if they manage it well, potentially maintain or even increase their pension fund assets over time, thereby preserving a legacy for their heirs.

But that strategy will take a hit in April of next year. The big inheritance tax winner has meant that since 2015 when annuities stopped being compulsory, pension drawdown has been the big tax winner. But that break only has a year to last!

Currently, money held in drawdown plans escapes inheritance tax (levied at 40 per cent on assets above the current nil-rate band of £325,000), allowing pension assets to be passed on to beneficiaries tax free. The only tax currently payable is income tax at the beneficiary’s marginal rate where the original owner of the pension assets was aged over 75 at the time of death.

From next April, however, pension fund assets will be subject to inheritance tax at 40 per cent if the total estate is valued above the nil-rate band, although transfers to spouses or civil partners will remain exempt from the tax. Jon Greer, head of retirement policy at wealth manager Quilter, expects these impending changes to increase the popularity of joint-life annuities, which carry on making payments to a nominated person in the event of the main policyholder’s earlier death.

A rich man’s product (note- a poor man’s alternative could be yours through the boss)!

The FT are promoting annuities for good IHT reasons, but of course 85% of the population have nothing to fear from IHT – they’ll never have the assets to leave to create a problem.

If people want to hang around a few months they may be lucky enough to have a boss that gets them into the company CDC with the chance of an invested pension that pays out like an annuity, except with a decent pay rise! [end of CDC plug] . Note only employers can make this possible!