Annuities firmly back 'in vogue' as rates jump 54% in two years

Guaranteed retirement income has been on ‘remarkable journey’

Jenna Brown
clock • 2 min read

Annuities have increased by 54% in two years putting the retirement income option firmly back on the map, Canada Life has said.

The provider said at the start of 2022, an annuity with a £100,000 purchase value would have paid an income of about £4,540 a year for someone aged 65 with no health or lifestyle conditions to declare. The same scenario today would see an annuitant paid £7,000 a year, it explained, an increase of 54%, driven by rising interest rates and the returns available on gilts. Canada Life said that over the course of a 20-year retirement, the annuity at today's rates would deliver about £49,200 extra income compared to an annuity sold in January 2022. Retirement income director Nick Flynn (...

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