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...

To continue reading this article...

Join Professional Adviser

  • Unlimited access to real-time news, industry insights and market intelligence.
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters.
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection.
  • Members-only access to the editor’s weekly Friday commentary
  • 
 Be the first to hear about our events and awards programmes.

Join

 

Already a Professional Adviser member?

Login

More on Income

L&G extends annuity partnerships with Aegon and Prudential

L&G extends annuity partnerships with Aegon and Prudential

Extended guaranteed income referral deals for five-year terms

Jenna Brown
clock 23 May 2023 • 1 min read
Robert Vaudry

Copia launches decumulation range with annuity element

Portfolios designed to address four main decumulation risks

Jenna Brown
clock 09 May 2023 • 2 min read
Craven Street Wealth acquires Bernard Barrett Associates

Craven Street Wealth acquires Bernard Barrett Associates

Deal with £1.25bn comes after last year’s acquisition of Tarvos Wealth

Alex Sebastian
clock 03 March 2023 • 1 min read