Annuity rates increase by 52% to hit 14-year high

According to a Press Release from Canada Life, average annuity rates have increased by 52% in the past nine months to reach a 14-year high. The findings revealed that a benchmark annuity of £100,000 at age 65 would now pay a guaranteed income of £6,873 a year compared to £4,521 at the start of 2022.

Clients who have previously entered Flexi-Access drawdown may be feeling a little unsettled by recent market volatility and could consider using annuities alongside drawdown, to secure another guaranteed income for life to sit alongside their State pension entitlements, blending a flexible income with a guaranteed income for life and removing some of the market risk from their retirement plans.

Annuity purchase can be achieved within the Flexi-Access drawdown pension in most cases if you client has a SIPP arrangement but if a SIPP is not in place, annuity purchase can still be facilitated directly with the annuity provider from the SIPP. Annuities are also available on a Fixed Term basis for clients who are contemplating retirement and have a few years until their State pension comes into payment and can work well as a blended approach to retirement income planning.

Please contact your usual TPO Adviser if you would like more information.

The information in this article is correct as of 14/11/2022.

The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.