Nearly a year ago, with the introduction of unisex annuity rates on the horizon and rapidly falling gilt yields, the annuity market was in a state of upheaval; rates were constantly changing (mostly in a downwards direction) as insurers jostled for market position not knowing what 2013 might bring.

One year on, with gilt yields having currently stabilised (although QE ending in America may change this), a strengthening British economy and some recent "talking up" of the UK's credit rating, the annuity market seems to have entered calmer waters. In fact, November 2013 was more of a wash-out than the fireworks display the market experienced last year.

Standard Level annuity rates: Two of the top four providers, Legal & General in first and Aviva in third place, held their rates unchanged from October for both Single and Joint Lives, with Legal & General paying £5,608.44 per annum for a Single Life and £5,145.36 for Joint Lives. Canada Life remains in second place, with £5,310.12 and £5,024.28 respectively, having increased its rates by 0.7% in the last month. The only real change is that Prudential has replaced Standard Life in fourth place in both tables, paying £4,932.96 for a Single Life and £4,633.80 for Joint Lives. However, Prudential remains a long way behind Legal & General though and this increase in rates may be more indicative of the publicity it has received about offering poor rates to existing policy-holders.

Standard RPI Linked annuity rates: There was slightly more movement in the RPI Linked annuity market. For a Single Life, Legal & General remains in first place, with an annual income of £3,047.40 (unchanged) and, for Joint Lives, Standard Life retained top spot, with an income of £2,642.40 (unchanged). However in second place in both tables, Standard Life dropped its Single Life rate by 1.6% and Legal & General dropped its Joint Life rate by 1.9%.

Smoker rates: The smoker rate market has tended to be more volatile and rate sensitive than the standard rate market over the last year. However, during November even this market was quiet. For a Single Life smoker, Legal & General remained top, with an income of £6,624.48 (unchanged). Just Retirement and LV= stayed in second and third place, both marginally increasing their rates by 0.65% and 1.4% respectively to £6,493.80 and £6,356.00. Scottish Widows replaced Reliance Mutual in fourth place. For Joint Lives, Just Retirement remains in first place, having increased its rates by between 0.7% and 1.6%. Of the other top four providers, only LV= made any change, increasing its rates by up to 1.2%. Rates from both Reliance Mutual and Legal & General remained static.

(All rates are based on £100,000 Purchase Price, with no guarantee period, and are payable monthly in arrears)

Richard Williams, Director at The Annuity Bureau from JLT comments:

"Whilst November was a quiet month in the annuity market, people approaching retirement should still take care to not assume that last month's best buy is still the best. Even a small change in rates can have a dramatic impact on total retirement income, so ensuring illustrations are up to date is still vital. It is therefore important to use an adviser who obtains real time illustrations to make sure this happens."

 Annuity Snapshots

Rates as at Monday 2 December 2013

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For more information on the latest annuity rates or retirement services please contact The Annuity Bureau on 0845 072 6774 or visit

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