Annuity rates could be about to fall on the back of currency concerns, after several months of stability, according to Alexander Forbes.
Rates have remained stable since the beginning of the years, the firm's research suggests, but major currency fluctuations in recent weeks may cause rates to fall in the near future.
While level annuities have remained largely stable, Canada Life has recently dropped both its level and RPI rates. Alexander Forbes Annuity Bureau believes this is an early indicator of more widespread reductions in retirement income levels.
Aviva currently offers the top level rate, at £6,420 for a 60-year old male with a £100,000 pension pot.
Smoker annuities have also remained stable, with Reliance Mutual offering the best rate of £7,023 for a 60-year old male smoker with £100,000 to spend. Canada Life was the only major player to cut its rate.
Tim Whiting, director of Alexander Forbes Annuity Bureau, believes global debt concerns, which have hit the pound and the euro, will increase pressure on providers to cut rates.
"There are worrying signs that rates may not remain steady for much longer. Canada Life may well have reduced its rates for its own commercial reasons, but over the long term demographics and gilt yields are likely to combine to cause rate fluctuations," he says.
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