Conventional annuity rates have dropped 7% since June and enhanced rates have fallen 5% in the same period, according to analysis from provider MGM Advantage.
The firm said these were the largest quarterly drops recorded by its Annuity Index since it started tracking rates in August 2009. Overall rates have dropped by 20% since August 2009, it added. Aston Goodey, distribution and marketing director at MGM Advantage, predicted further falls. He explained: "Annuity rates are in free fall, largely driven by record low gilt yields. Annuity providers have yet to fully price in the effects of Solvency II or the EU Gender directive so we expect further falls over the coming months unless we see a significant upward movement in gilt yields." ...
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