Annuity income tumbles £2k since Budget pensions overhaul

Laura Miller
clock

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 ...

To continue reading this article...

Join Professional Adviser for free

  • 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 Pensions

One year on: Abolished lifetime allowance still throwing up advice queries

One year on: Abolished lifetime allowance still throwing up advice queries

Scheme-specific lump sum queries

Andrew Tully
clock 24 April 2025 • 4 min read
Government to set up small pensions pot consolidator

Government to set up small pensions pot consolidator

Pension Schemes Bill measure will reduce admin costs and boost pots

Jonathan Stapleton
clock 24 April 2025 • 3 min read
Pension engagement only way to cut 'retirement anxiety'

Pension engagement only way to cut 'retirement anxiety'

Verona Kenny says industry has ‘moral duty’ to push engagement

Jenna Brown
clock 23 April 2025 • 3 min read