The global index provider, today announces the launch of its new FTSE UK Level Annuity Index Series. The benchmarks are designed to allow users to compare changes in the value of a pre-retirement fund with changes in annuity prices.
The indices have been created in association with Legal and General Investment Management, and provide market participants with a transparent benchmark for retirement funds. Annuity rates differ depending on individual circumstances, and the series reflects this with multiple indices representing a range of retirement profiles, creating a suitable comparison to assess fund performance.
The index series will be calculated daily, using the average of the three highest annuity rates for different retirement profiles: Early, Standard and Late. The suite of products will also include the FTSE UK Level Adjusted Annuity Indices, which measure the performance of annuity prices adjusted for the effect of anticipated interest rate movements.
Peter Gunthorp, Managing Director, Research & Analytics, FTSE, said:
“As investors approach retirement age, they increasingly review the cost of annuities. FTSE has created this new UK Level Annuity Index Series to provide users with greater insight into the market, which will prove to be a vital new tool for Defined Contribution savers attempting to meet their retirement objectives. With automatic enrolment on track to create nine million new UK DC savers by 2018, we believe products of this nature will continue to grow in demand.”
Aaron Meder, Head of Investment, Legal & General Investment Management, said:
“At Legal and General we are dedicated to improving investor outcomes. The launch of the FTSE UK Level Annuity Index Series represents a significant step forward, providing an independent, objective and transparent way of measuring the success of all pre-retirement strategies against the real-world outcomes investors care most about.”
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