Annuity Rates, Annuities, Pensions, Divorce
Equity release lifetime mortgages
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources

29 November 2012 last updated
Highest annuity rates reduced 2% means lower pensioner income

Providers have reduced the highest annuity rates again this month for both standard and impaired annuities with Legal & General reducing rates by up to 2% following a fall in gilt yields.

Following the decrease in the 15-year gilt yields yesterday by 8 basis points to 2.23% providers in the UK have reduced annuity rates by 2% with Legal & General and Canada Life leading the way.

Other impaired annuity providers such as Just Retirement have also reduced rates by 1% following two cuts earlier this month of between 1-2%. The results for pensioners is an immediate fall in their annuity income which will apply for the rest of their lifetime as once an annuity is set-up it cannot be changed.

As a general rule a fall of 8 basis points for the 15-year gilt yields would translate to a 0.8% decrease in annuity rates and this has been exceeded by providers as they prepare for Unisex rates with the EU Gender Directive.

Annuity rates reduced
  More annuity topics
  November News 2012
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Female annuities have also been reduced

The new Unisex annuity rates will decrease male rates and increase female rates yet providers are reducing both male and female annuities. For pensioners retiring now the impact of these lower rates can be significant.

For example, for a male aged 75 with a fund of £100,000 on a single life, level basis paid monthly they could purchase an annuity income from canada Life of £7,684 pa and this has been reduced by £161 pa to £7,523 pa. The Office of National Statistics (ONS) indicate that a male aged 75 will live for 10.7 years so this recent decrease will cost £1,722 in lost income over his lifetime. In fact based on this life expectancy he could expect to receive on £80,496 of his original fund back from the annuity, £19,503 less than his original fund.

For a female aged 75 with the same £100,000 she could buy an annuity income of £7,164 and this has reduced by £96 pa to £7,068 pa. The ONS expect her to live 12.5 years so the cost to her will be £1,200 in lost pension annuity income over her lifetime. She can expect to receive £88,632 or £11,367 less than her original fund.

Other options to increase annuity income

As a way to boost income as annuity rates continue to fall, pensioners in good health could receive 30% more initial income with an investment backed or with profits annuity where the income is smoothed over time which reduces volatility when compared to equity markets. This annuity is more suitable to people with other private pensions or final salary schemes as they are slightly more risky than conventional open market option annuities.

Where a pensioner has lifestyle medical conditions such as high blood pressure, Cholesterol, are a smoker or is overweight about 18% more income could be offered from an enhanced annuity. For more severe medical conditions such as diabetes, heart conditions or cancer up to 40% more income could be provided from an impaired annuity.

News related stories:
Impaired annuity providers reduce rates by 2% before Gender Directive
Impaired annuity rates have been reduced up to 2% as gilt yields fall
Standard annuity rates now 1.5% lower income for pensioners
Smoker annuity rates decrease by 2% across the board
Retirement annuities reduced by 1.9% from leading provider
Impaired annuity rates reduce over 2% by providers
Call 020 8816 7501 for a quote
Annuity Rates
  Age Single Joint  
  55 £4,433 £4,127  
  60 £4,914 £4,660  
  65 £5,563 £5,094  
  70 £6,272 £5,976  
£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:

Gilt yields lower as equities fall
Annuity Rates December 2018 Gilt yields are lower with geopolitical tension between the US and China
Annuity rates resist fall in gilt yields
Annuity rates resist fall Annuity rates are steady following gilt yields fall on fears of US slowdown
Retirement income down 14%
Retirement income down Brexit turmoil and equity volatility sends investors to the safety of gilts and bonds
Drawdown numbers hit record high
Pension drawdown withdrawals hit record high

Data from HMRC shows a record 5.9bn accessed in 2018 using drawdown

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook and Google+
  Facebook Page Twitter Page Twitter Page   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-19 All Rights Reserved