Providers took a ‘wait and see’ approach to adjusting annuity rates over the last month, according to new figures from the Alexander Forbes Annuity Bureau.

The figures show that Aviva retained top place for level annuities, holding rates at £5,540. Canada Life, Hodge Life, L&G and Prudential also held rates at £5,393.52, £5,341, £5,338.20 and £4,848.12 respectively.

All figures are based on a £100,000 level annuity purchase from a 60 year old male.

Inflation-linked annuities showed the same trend, as all providers held rates. Standard Life remained top of the providers at £3,022.80, closely followed by Aviva at £3,020.00, then Canada Life at £2,900.16, L&G at £2,883.48 and Prudential at £2,677.44. Figures are based on a £100,000 RPI-linked annuity purchase by a 60 year old male.

The only change this month was to Aviva’s smoker rate, which dropped by £150 to £5,910. Mutual Life remained stable at £6,721.80, as did LV= at £6,377.05, Canada Life at £6,099.96 and L&G at £5,841.24. Figures are based on a £100,000 purchase from a 60 year old male smoker.

Head of Alexander Forbes Annuity Bureau Gemma Goodman said providers were taking the safe route on account of continuing uncertainty in the market.

“Record low interest rates and the potential for a further round of QE are at the heart of the issue; both are impacting negatively on gilt yields and ultimately annuity rates. The recent announcement from the Bank of England that interest rates will remain frozen at 0.5 per cent will, unfortunately, do nothing to help improve the current situation for pensioners,” Goodman said.

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