Annuity Rate Highs

Annuity Rate Highs

According to the Association of British Insurers (ABI), the majority of retirees are getting their annuity at a rate close to the highest rate available.  

Research showed that 85 per cent of single life level annuity customers receive a rate that is at least 95 per cent of the highest rate available.  

The ABI also said “significant steps were being taken to encourage consumers to look around the market, including improving the information provided to consumers at retirement and encouraging them to use the open market option”.

Director of research at ABI and chief economist Rebecca Driver said “There appears to have been outcome improvements.  In 2002, FSA research found that almost 80 per cent of joint life annuitants received a rate of 85 – 95 per cent of the highest rate available.  Ours shows that almost 80 per cent of joint life annuities are sold at a rate above 95 per cent of the highest rate”.

Our view

This is a move to protect insurers who do not make it clear that retirees have the right to search the open market for the best income annuity rate possible.

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