There has been a lot of movement with enhanced and conventional annuity rates. The average rates on standard annuities fell by just less than 1% between April and June this year compared to a fall of 0.50% between January and March this year, whilst enhanced annuity rates fell 0.38% and 0.65% respectively. The difference between average standard annuity rates and enhanced annuity rates has increased from 22.7% for men in March to just over 24% in June and from 22.6% for women in March compared to 22.69% in June this year. For the first five years of retirement, this would mean a difference of around £3,800 for a man buying an annuity with a £50,000 pension fund, and just over £3,400 for a woman.
Looking at both the standard annuity and enhanced annuity markets as a whole, the difference between the top and bottom quartiles continues to widen somewhat for men but has reduced ever so slightly for women. In March 2010, the average difference for men was about 35% and this rose in June this year to 35.6%. The corresponding figures for women are 34.7%% and 33.8% respectively. This might seem a strange way of looking at enhanced annuity rates, but does enhance the need to shop around.
