The significant improvement in annuity rates over the past 12 months has also had a positive impact on the cost of guarantees, Canada Life research shows.
In one example in the insurer's research, the margin between no guarantee and a 20-year guarantee is just a 4% reduction in annual income, with a £100,000 annuity securing an income of £6,532 vs £6,270, a reduction of £262 a year. The 20-year guarantee will return income of at least £125,400, irrespective of what happens to the customer. Retirement income director Nick Flynn explained: "As annuity rates have improved so has the cost of the death benefits available. No longer do clients need to trade off a big drop in income to provide valuable guarantees. The reduction in income from ...
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