Pensions - Articles - Annuity incomes hit a six month high

 With more interest rate increases potentially on the radar we could see further increases in the coming months.

 To see the latest annuity best buy rates look here: Annuity Rates: View Best Annuity Rates from the UK Market

 Helen Morrissey, Head of Retirement Analysis at Hargreaves Lansdown: “Annuity rates are on the rise again with a 65-year-old able to get more than £7,000 a year from their £100,000 pension. The last time rates were this high was back in December 2022. They are still some way off the highs we saw in the weeks following the mini-Budget when the same person could have got an income of £7,586 per year but if we compare them to where they were two years ago (£4,979) then people are certainly getting far more for their money than they once did.

 After years of being consigned to the sidelines of retirement planning annuities are once again taking centre stage and with more interest rate rises on the horizon there’s every chance, we could see further income increases in the months to come. For those in need of some level of guaranteed income in retirement then annuities should always be a consideration. However, their reputation for being inflexible and offering poor value for money has made people hesitate. Their improved fortunes will certainly prompt more people to take a closer look.

 Those concerned about locking into an annuity today and potentially missing out on increased income in future could consider annuitising their pension in tranches throughout retirement rather than in one transaction. This enables you to build guaranteed income as your needs increase while leaving the rest invested where it can hopefully grow further. Added to this you tend to get increased incomes as you age - for instance a 70-year-old with a £100,000 can currently get up to £7,838 per year compared to £7,017 for a 65-year-old. You may also qualify for an enhanced annuity as you age which will give your income a further boost.”

 *Single life, level with a five-year guarantee.