Pension assets can be impacted by interest rate changes, which in turn are directly impacted by what the Bank of England decides. Currently, the central bank has the base rate 0.1 percent and the bank's next decision on it will occur on May 6.
Ahead of the next base rate decision, Andrew Megson, the executive chairman of My Pension Expert, reflected on what may be on the horizon for pensioners: "It seems unlikely that we will see any major changes to interest rates. The economy is only just beginning to reopen, following the UK’s third national lockdown.
"As such, the Bank of England will be keen not to rock the boat too soon and hinder the country’s post-Covid recovery.
“A stable market will certainly benefit pension investments. It will instil market confidence and enable investments to stabilise and return to pre-pandemic levels.
"Of course, such an event would allow savers some respite from Covid-driven financial anxiety.Insurance Loans Mortgage Attorney Credit Lawyer
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The Bank of England base rate decision may impact pensions (Image: GETTY )
“However, prolonged periods of low rates won’t be welcomed by everyone.
"After all, low interest rates will keep annuity rates at rock-bottom levels. Annuities have been falling in popularity for some time now – however, some people may have been holding out until annuity rates rise to lock in a more generous retirement income. But given that it is unlikely that rates will increase significantly for some time, it may be beneficial for individuals to reconsider their retirement strategies.
“I would encourage savers to thoroughly review their different retirement options – from alternative investments to flexible drawdowns.
"This can admittedly be an overwhelming and confusing prospect. As such, I would recommend that savers seek independent financial advice.
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"Advisers will take into account the entirety of a saver’s circumstances and help them to develop a tailored retirement strategy to suit their specific needs. Thus, savers will be able to form a sustainable retirement plan, and even prepare their strategy if