Annuity income tumbles £2k since Budget pensions overhaul

Laura Miller
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The average annuity today delivers just over £2,000 less income over retirement compared to one bought in March, when the Chancellor swept away the need for savers to buy the product in his Budget, according to retirement specialist MGM Advantage.

Average annuity rates have fallen in the third quarter of 2014 by 2.38%, MGM's research suggests. The average standard annuity rate fell by 3.01%, while enhanced rates fared slightly better, reducing by 1.88%. That means the average annuity today of £3,074 per year - based on a £50,000 pension pot - would pay £2,058 less income over an average retirement compared to the equivalent annuity purchased in March. Annuity rates are linked to what it costs the government to borrow over a 15-year term, the yield on gilts, because insurers largely buy these gilts to provide the income paid to ...

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