Annuity rates rise but at what cost?

According to an article in the Actuarial Post (Actuarial Post of 16 June 2023) analysis of annuity rates from Just Group, switching from the least to the most competitive provider can deliver nearly 18% more income. Just Group said this is equivalent to a 65-year-old in good health with a £50,000 pension receiving £3,470 a year (6.94%) income rather than £2,952 (5.9%) — amounting to more than £500 a year for the rest of their lives.

Stephen Lowe, Group Communications Director at Just Group, commented: “After many years working towards higher take-up, it is good to see the number exercising their ‘open market option’ right to shop around rising to 64% but that still means more than one-third are likely to be missing out on income... Annuities are the only retirement solution that offer guaranteed income for life which removes investment and longevity risk. Retirees often like to know they are receiving a core flow of secure income that they can spend this month knowing more is coming their way next month.”

At The Private Office we use cash flow modelling to map out our clients’ financial futures and explore different scenarios, including how different retirement ages can impact the lifestyle able to be achieved in later life.  
Get in touch to find out more about how we help our clients to plan for their retirement, and how we could help you.

The information in the article is correct as at 27/07/2023.

Please note: The Financial Conduct Authority (FCA) does not regulate cash flow planning.