Overall, rates are up by 12% since January, helping annuity rates to recover to a two-year high.
The retirement income specialist has also revealed the gulf between the best enhanced annuity rate and worst standard annuity rate is around 38%, meaning many people with health or lifestyle conditions could be missing out on thousands of pounds of income. Up to 70% of people at retirement could qualify for a better rate because of a health or lifestyle condition, and yet only 6% of consumers who purchased an annuity in the second quarter of the year without advice purchased an enhanced annuity (this compares to 45% when advice is provided or people shopped around).
Aston Goodey at MGM Advantage comments:
“Annuity rates have had a really bumpy ride, but we have seen a steady improvement this year with rates hitting a two-year high, largely driven by the returns available on bonds and gilts. This is great news for people looking to generate a retirement income, although it will always pay to shop around for not only the right shape of income but also the highest rate.”
