Retiring in a low annuity rate environment

clock

Billy Burrows looks at the different retirement income options available for clients

Annuity rates are at their lowest levels ever. In June 2012 the yield on our benchmark gilt (15 year gilt yield as quoted in FT) fell the lowest levels since records started in 1703 and currently stands at 2.09%. Over the past year our benchmark annuity (Male age 65, Female 60, £100,000 purchase, joint life 2/3rds, guaranteed five years and level payments) has fallen by over 8%, and over the past three months it has fallen by 3%. To make matters worse annuity rates could fall even lower as the Sword of Damocles in the guise of Solvency II and gender neutral annuity pricing still hangs...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Income

M&G's opens fixed term annuity to UK retail market after soft launch

M&G's opens fixed term annuity to UK retail market after soft launch

Prudential Guaranteed Income Plan backed by £128bn With-Profits fund

Jenna Brown
clock 22 July 2025 • 1 min read
Targeted support: FCA rules out specific annuity suggestions

Targeted support: FCA rules out specific annuity suggestions

Firms must signpost consumers to MoneyHelper’s annuities comparison tool

Jenna Brown
clock 30 June 2025 • 3 min read
How annuity underwriting needs to change to meet Consumer Duty

How annuity underwriting needs to change to meet Consumer Duty

'This is an industry systematically delivering poor outcomes'

Andrew Gething
clock 24 June 2025 • 4 min read