If there were such a thing as a pension-themed scary movie, annuities would play the part of the character you thought was despatched in the opening scenes, only to unexpectedly reappear in a twist designed to shock in the climax.
The first meaningful interest rate rises in more than a decade have revived a retirement product most had consigned to the grave, following the advent of pension freedoms in 2015.
During that time, annuities had become a horror that had been Hammered, if you will.
Annuities offer better value
Putting film metaphors to one side, as rates rise in concert with gilt yields, so, too, does the value of annuities. To the point that they are now at a 14-year high.
Perhaps we should not be surprised that savers are taking a closer look. Annuities are one of the few guarantees that can currently be put in place in a more uncertain world, offering a definite income in retirement for savers in defined contribution schemes.
And among those members will be employees in your workplace scheme. They will look to you, their employer, for some kind of guidance at a time when they have to make many important decisions alone.
But this is a decision they can approach with a measure of confidence if they can see the clear choices ahead.
While there are a variety of annuities, their central appeal is they can offer the certainty of income for a lifetime.
Pension Potential is Punter Southall’s solution to helping members view retirement much more clearly. It won’t cost you anything to make it available on your company website and can sit side by side with your employee benefits. For members, it’s also free to use.
Like other comparison calculators, it brings up every annuity on the market after a few clicks but unlike others, it also demonstrates the impact on your retirement income if you were to opt to draw down from your invested pot, take cash or, indeed, a mix of some or all. It also offers the opportunity to talk to a financial planner, should your circumstances make this appropriate.
Smart Pension has now incorporated Pension Potential onto its website for its one million-plus members (covering 70,000 employers) to assess what their pot will be able to buy them in later life, so we know it's fulfilling a need.
We know retirement is changing and is even more multi-faceted. For everyone reaching this stage of working life, it’s critical they are able to make an informed choice.
Unlike those old films, annuities are no longer springing an unpleasant surprise just when it looks like a happy ending.