The annuity market is buoyant because the Financial institution of England’s fee pause has encourage individuals to make the leap, in response to Hargreaves Lansdown.
On common there have been 3.3 quotes per individual in January 2024 up from 2.9 in January final yr. That’s indicative of individuals purchasing round for the very best deal, Hargreaves stated.
Jack Williams, head of pensions and retirement at Hargreaves, stated there was robust curiosity from individuals seeking to safe a stage of assured revenue in retirement.
He stated the relative calm we’ve seen as annuity charges have settled in current months has inspired individuals who in any other case might have hesitated “to make the leap now” for concern of lacking out on a greater fee later.
He stated: “We’re additionally seeing individuals use extra of their pension to transform to revenue. With inflation on the best way down and rate of interest cuts doubtlessly feeding by within the coming months, annuities look higher worth.”
Simply Group warned that retirees ready till later in life to purchase annuities are at most danger of lacking out on additional lifetime revenue by failing to buy round for the very best deal.
FCA evaluation of annuity charges revealed final yr discovered that the hole between the very best and worst offers is way larger at age 75 than at age 70 or 65. The figures confirmed a wholesome 75-year-old can safe about 17% extra revenue from the very best annuity supplier in comparison with the worst. The perfect-worst hole is 14% at age 70 and 11% at age 65.
Stephen Lowe, group communications director at Simply Group, stated: “Enhancing returns have pushed up demand for annuities in current months however patrons should do their homework to keep away from the poor worth suppliers and to safe the best revenue potential.”
In the meantime common annuity buy value sizes purchased by Hargreaves climbed 14% in January 2024 in comparison with the identical interval final yr. 9 in 10 functions had been on an enhanced foundation.
Presently, a 65-year-old with a £100,000 pension can rise up to £7,117 per yr from an annuity, in response to the HL annuity engine.
