The case for annuities: A solid retirement income foundation

Annuities are once again back in the spotlight as rates increase

clock • 3 min read

Annuities are the foundation on which a sustainable and secure retirement income is built, writes William Burrows

Annuities are back in fashion again - long live the annuity! The reason for the resurgence in annuities is the increased income as annuity rates increase. A year ago, the benchmark annuity (£100,000, ages 65 and 60, joint life 2/3rds and level payments) was paying about £4,800 per annum gross and today it is paying over £6,000. An increase of 26%. Rates have increased because yields have increased. There is a useful yardstick; for every 100-basis point rise in yields we can expect annuities to increase by about 10%. This doesn't work exactly but is useful when trying to predict annuit...

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