Annuity Rates, Annuities, Pensions, Divorce Annuity Rates Charts
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources
   


2 April 2016 last updated

Best annuity rates reduce by 4% from impaired provider Just Retirement

The best annuity rates have reduced by up to 4% as market leading provider Just Retirement reduces their annuity rates after falls of the 15-year gilt yields at the beginning of the year.

Just Retirement is a leading impaired annuity provider and since the new pension freedoms have developed more competitive lifestyle rates to compete with conventional annuities.

This follows the significant 75% reduction in the number of annuities purchased by people at retirement. Many are opting to take their full fund as cash less tax, flexi-access drawdown or a fixed term plan.

It means enhanced and impaired annuity providers are dominating the conventional annuity market by offering lifestyle conditions which may only include a persons height, weight, age and postcode.

The reduction in rates from Just Retirement means our benchmark example is now near to the lowest ever level. Even so any improvement of yields from the current 1.95% would see higher annuity rates.

 
Impaired annuity rates lower
  Just Retirement has reduced their annuity rates by up to 4% back in-line with gilt yields over the year
  More annuity topics
  Quarter 2 News 2016
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Annuity rates lower than a year ago

Our benchmark example for a 65 year old with a fund of £100,000 buying a lifetime annuity on a single life, level basis would receive £6,191 pa last month. After Just Retirement lowered their rates, this has reduced by £242 pa or 4.30% to £5,191 pa.

In the middle of December 2015 the 15-year gilt yields were as high as 2.30% and a month later reached the all time low of 1.68% before recovering to 1.77%.

Annuity rates threat as yields fall
Fig 1: Chart comparing annuity rates and 15-year gilt yields


Annuity rates are mainly based on the movement of the 15-year gilt yields. From the above chart the yields have improved and are now at 1.95%. The latest fall rates mean the benchmark annuity is 1.71% lower than a year ago, although more in-line with yields over this period of time.

For the benchmark example in terms of lifetime income, the Office of National Statistics (ONS) would expect a male to live for 17.3 years and he will have £4,186 less over his lifetime. For a female she can expected to live for 20.4 years increasing her income by £4,936.

Alternatives to annuities

Annuity rates would recover with a rise in gilt yields and interest rates at some point in the future.

An alternative would be to consider a fixed term annuity allowing you to select an income and term until annuities can recover. At the end of the term you would receive a guaranteed maturity amount and can consider all options again such as an annuity from any provider, flexi-access drawdown, taking the fund as cash less tax.

Also popular is flexi-access drawdown allowing you to take your tax free lump sum now and leave the remaining fund invested, take an income, a lump sum or even contribute to the fund.

News related stories:
Latest annuity rates could fall as gilt yields reach 12-month low
Annuity income lower as markets fall on global slowdown fears
Impaired annuities lower by up to 6% ahead of Solvency 2 start date
Annuity rates uncertain as US Fed signals interest rate rise more likely
Annuity Rates
  Age Single Joint  
  55 £6,361 £5,898  
  60 £6,842 £6,244  
  65 £7,474 £6,843  
  70 £8,405 £7,660  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
  Annuity Rates  
Annuity Quotes
  Plan your annuity and get quotes from the 12 leading providers  
 
  free annuity quote Free Annuity Quotes
  annuity quote no obligation No Obligation
  annuity quote all providers From All Providers
 
  Annuity Quote  
  Annuity Rates News:

Annuities rise 6% to eleven year high
Annuities rise 6% to 11 year high Annuities rise 6% and gilt yields increase 90 basis points due to central bank action
Gitl yields rise 87 basis points
rise 87 basis points Gilt yields higher as investors shrug off global recession fears as base rates rise
Retirement income at record high
Retirement income soars Retirement income rises by 71.6% as yields and annuities are driven higher
Pension annuities fall on recession fears
Pension annuities fall Pension annuities fall and gilt yields are lower by -27 basis points to 2.32%
Annuity rates rise but yields weaken
Annuity rates rise 7pc last month Annuity rates rise by a record 7% for a single month but gilt yields weaken

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page
Sharingpensions.co.uk   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-22 Sharingpensions.co.uk. All Rights Reserved