Level annuity rates on the up
Interesting news, and good news, some pension annuity rates are 5% higher than October last year. It would appear that annuities have been unaffected by the global meltdown of the financial markets with some providers slightly lifting level annuity rates.
In a recent survey, the top level annuity rate from Norwich Union rose by £60 to £7100, making up some of its rate cut of £110 last month, and Canada Life improved its level annuity rate by £73 to £7071.
We have seen a few small increases in level annuity rates as we enter October, putting level rates some 5% higher than they were in October last year. However, the likely trend as we look ahead is downward; with the next movement in interest rates likely to be down, it is hard to see level annuity rates maintaining their current levels in the long term.
Inflation-linked annuity rates have been slipping for some time. The best rate available today is some 4% lower than twelve months ago and it is likely that this trend will continue in the future.
