Standard Level annuity rates: There was little change to Standard Level annuity rates and no change to the provider ranking in May for both Single and Joint Life annuities.
All providers marginally increased their rates for single life annuities, with Aviva increasing the most (0.79%). For joint life annuities, again Aviva provided the highest increase (0.72%) and the only decrease came from Prudential (-0.36%).
Legal & General maintained the top place in the tables paying £5,490.60pa and £5,099.52pa for Single and Joint Life annuities respectively.
Standard RPI Linked annuity rates: Only minor changes were apparent for providers offering RPI Single and Joint Annuities. Provider positions remained the same for Single Life annuities with only Legal & General showing a marginal drop in rates (0.17%). All other providers increased their rates slightly, with Prudential showing the highest increase (3.60%). For Joint Life annuities Aviva dropped out of the top four to be replaced by Prudential. Standard Life maintained its rates, but Legal & General's dropped slightly (-0.25%). Legal & General tops both Single and Joint life tables, paying £2,984.04pa and £2,620.68pa respectively.
Smoker rates: Enhanced annuities saw more significant changes. Only Reliance Mutual and MGM Advantage showed increases to their rates, with the former occupying the top spots across all categories. Just Retirement decreased its rates for all categories with its Single Life declining by 2.50% (£6,299.40pa), Joint Life Male 60/Female 57 falling by 0.52% (£5,726.28pa), and Joint Life Male 65/Female 63 down by 0.70% (£6,346.68pa). These changes resulted in them dropping out of the top two for the Single Life and Joint Life Male 60/Female 57 tables. Scottish Widows also cut its rates across all categories but only by marginal amounts. With only a small increase to its rates, Reliance Mutual now occupies top spot across all categories, paying £6,369.00pa for Single Life, £5,837.40pa for Joint Life Male 60/Female 57 and £6,408.96pa for Joint Life Male 65/Female 63 annuities.
(All rates are based on £100,000 Purchase Price, with no guarantee period, and payable monthly in arrears)
Richard Williams, Director, The Annuity Bureau from JLT, comments:
"Annuity rates again remained relatively stable during May, with only marginal changes over the month. The consultation on the pension reforms announced at the March Budget ended on 11 June, but so far annuity rates have not been impacted. However, we will have to wait until the finer details are outlined as we draw ever closer to the implementation date of April 2015 to see if this continues to be the case.
"Since LV='s introduction of its one year fixed term annuity, both Partnership and Just Retirement have followed suit in an attempt to offer immediate access to their tax-free cash, whilst leaving the option for flexibility post April 2015. Further new products are in development from most providers, who will be looking to move quickly once clarification has been provided.
"Despite the negative press commentary regarding annuities as a product, care should be taken to ensure that those retiring are fully aware of the implications of funding their retirement without reference to the only retirement income product that guarantees to pay an income throughout retirement, however long that may be. The accessibility of expert advice regarding all of the options is an absolute must and we believe that this education should be started as early as age 50/55."
For more information on the latest annuity rates or retirement services please contact The Annuity Bureau on 0845 072 6774 or visit www.annuitybureau.co.uk.