Annuity rates suffer further fall

PRESSURE is growing on retirees to shop around for the best annuity rates as the income provided by the average annuity continues to fall.

The MGM Advantage Annuity Index, which tracks the income paid on standard and enhanced annuities, has revealed that the average standard annuity rate fell by 0.5 per cent in March, compared with 2.16 per cent in November, while enhanced annuity rates – available to those in ill health or who smoke – slipped by 0.65 per cent. The difference between an average standard and enhanced annuity rate is now 22.7 per cent for men and 22.6 per cent for women, a differential that translates into 3,663 extra income in the first five years of retirement for a man buying an annuity with 50,000, and 3,404 for a woman.