Yes, we’re already seeing increasing UK annuity rates in 2010. Level annuity rates have increased in 2010 already giving a real boost to the pension industry. The provider with the best rate at the moment is Aviva (previously Norwich Union) who are now offering an annuity income of £6,420 a year, which equates to an extra £120 per year compared to what it was offering last month, December, 2009. This is based on a 60 year male life with a pension fund of £100,000, after taking tax-free cash, a yield of 6.42%. Okay, not much of an increase, but it’s something.
Tim Whiting, from the Annuity Bureau who supplied the information comments that there are many UK annuity rates on the rise as we enter 2010. An increase in gilt yields has lead to these higher annuity rates, he went on to add. The government is due to increase the minimum age at which you can opt to take your pension benefits from 50 to 55 in April later this year, so if you are approaching 50, now just might be a good time to secure these improved rates. This increase in rates will be welcomed by many annuitants, as it follows the news that rates had actually been falling towards the end of 2009.
