Level annuity rates have increased this year giving a real boost to the pension annuity industry. The provider with the best rate is Aviva who are now offering £6,420 a year, which equates to an extra £120 compared to what it was offering in December 2009. This is based on a 60 year male with a pension pot of £100,000.
Tim Whiting from the Alexander Forbes Annuity Bureau who supplied the data comments that there are “many rates on the rise as we enter the new year.” An increase in gilt yields has lead to higher annuity rates, he went on to add. The government is due to increase the minimum age at which you can take your pension from 50 to 55 in April of this year, so if you are approaching 50, now could be a good time to secure these improved rates.
This increase in rates will be welcomed by many potential annuitants, as it follows the grim news that rates had been falling towards the end of last year.