Retirees urged to annuitise now or face further rate falls
The provider’s quarterly annuity index revealed conventional annuity rates dropped by 2.13% in the last three months, and enhanced annuities by 2.29%.
It said the 2.1% drop in overall average annuity rates between March and June this year means the index has seen an overall drop of 14% since June 2009 when it was started.
Distribution and marketing director Aston Goodey urged people about to retire to buy their annuity now to avoid potential further reductions in retirement income.
Goodey said: “With annuity rates unlikely to go up in the near future, there could be a cost to delaying the purchase of your annuity. The impact of Solvency II and the billions of pounds being pumped into the British economy to buy gilts has affected annuity rates.
“This, teamed with the forthcoming EU gender ruling which, from December, will stop insurers paying men higher annuity rates, means that if you are going to buy an annuity – then you might wish to consider buying now before rates come down further.”
The index also showed the difference in income between the top enhanced annuity rates and bottom standard annuity rates for people aged over 65 with a £50,000 pension pot, is 43% for men and 46% for women.