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Interest rates: Bank of England base rate choice due next week – a rise may alter pensions

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The BOE is currently scheduled to look at the base rate again on August 6, which is less than a week away.

Given the economic outlook, it’s unlikely that any drastic changes will be made but the BoE could either keep the rate as it is, increase it or even move it into negative territory.

While it is well known that the base rate impacts general savings products and mortgage payments, some may not realise that pensions can also be impacted by alterations.

Andrew Megson, the Executive Chairman of My Pension Expert, explained that would happen if the base rate rises next week, correspondingly pushing up interest rates across the board: “A rise in interest rates, even a small one, will be positive for pension planners – especially those looking to take out an annuity (a retirement finance product purchased with a pension pot and offers income for life or a fixed period of time agreed with the lender).

READ MORE: DWP warning: Universal Credit, PIP and state pension payments to alter



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