By Matt Ritchie
Level and inflation-linked annuity rates fell over the last month, though smokers’ rates remained stable according to the latest figures from the Alexander Forbes Annuity Bureau.
Aviva had the best rate for a 60 year old male purchasing a £100,000 level annuity, though it had dropped by £200 to £5,340. Hodge Life followed, having dropped rates by £97 to £5,244. Canada Life was third after dropping rates from £5,393 to £5,197 followed by L&G who dropped rates by £156 to £5,181. Standard Life was fifth at £4,822.
Standard Life offered the best rate for the RPI-linked equivalent annuity, having dropped rates by £84 to £2,938. Aviva was second after cutting rates from £3,020 to £2,860.
Canada Life fell from third place to fourth as they dropped rates by £121 to £2,779.08, overtaken by L&G who cut rates by £92 to £2,791.32.
AEGON Scottish Equitable joined the top five with rates at £2,537.
Meanwhile, the only changes for smokers level annuity rates this month came from LV= who dropped rates by £133 to £6,243 and fourth placed Aviva which increased its rates by £150 to £6,060.
Head of Alexander Forbes Annuity Bureau Gemma Goodman said the ongoing crisis in Europe was a “major catalyst” for the situation with annuities.
“Compounding the issue is the government’s quantitative easing programme, with calls for a further round of QE providers are understandably remaining cautious.”
Although providers had cut rates, Goodman said the difference between the various providers’ offerings remained stark.
“Many retirees automatically accept the annuity offered by their pension provider, but with rates at an all-time low and no relief in sight, it is more important than ever that those approaching retirement shop around for the best possible rate to potentially save themselves thousands.”