A bit of good news for a change about pension annuity rates. They are holding steady at the moment. ‘Level’ rates held firm in July with several firms competing for top of the table, experts say. The top male rate from Aviva (previously Norwich Union) was unchanged at £6450 for a 60 year old with a £100,000 fund.
Meanwhile Aegon Scottish Equitable upped its female annuity rates by £88 per annum to £6108 for a 60-year-old with a £100,000 fund, taking the top slot from last month’s number one Aviva by a miserly £8 per annum. However, the best index linked rates in July have reduced with last month’s leader Canada Life cutting its rate by £74 per year to £3695 (male, aged 60, £100,000 fund) demoting it to fourth place on the league table. Aviva gained the top position with its best rate of £3740 for a male, aged 60, with a £100,000 fund.
The top level smoker annuity rates from LV= (Liverpool Victoria) of £7506 (male, aged 60, smoker, £100,000 fund) was unchanged for the third month in a row and all top four providers held their rates unchanged since the previous month, June. Generally, rates have held firm as we enter July, with changes only limited among the top providers. However, over the past year the picture is less satisfactory with top level rates down around 9%-10% and smokers rates falling by about 6%-7% over the year.
This longer term trend with rates underlines the importance of retirees taking advantage of the open market option at retirement and shopping around for the best rates available. Industry campaigns to speed the transfer of an annuity are now beginning to bear fruit and it is now even quicker and easier for retirees to opt to buy in the open market.