In 2024, annuity sales rose by 24 per cent. Here’s why this could be good news for retirees
Pensioners who’ve invested in an annuity are now reaping the benefits with a yearly income of £7,260.
The pension annuity rates are soaring to 15-year highs, leading experts to advise that it’s a prime time to purchase one. The Association of British Insurers has revealed a 24% surge in annuity sales in 2024.
Wealth management expert Andy King from Evelyn Partners said: “Annuity rates have not been as high as today since the middle of 2008. There was a short term blip after the Liz Truss tenure when rates reached 7.4% but they then dropped sharply down to just over 6% within a period of 6 months.”
Meanwhile, Mark Ormston of Retirement Line highlighted: “The average annual income difference between the lowest and highest offering on the open market was 14 per cent. That’s 14 per cent less every year for the rest of someone’s life! This gap increases when health and lifestyle factors are included.”
Annuities remain a solid retirement option in 2025, thanks to their stability and appealing returns, reports Birmingham Live. Nick Flynn, Canada Life’s director of retirement income, cited several causes behind the uptick in annuity rates, including: “Additional government spending, global uncertainty and higher taxes are all contributing to the recent increase in the cost of government borrowing.
“Whilst there are no cast iron guarantees, if this trend continues, then it’s a strong possibility that annuity rates will be maintained or even increase in 2025.
“Annuities offer individuals security and a guaranteed income for life. However, it’s important to seek the advice of an annuity specialist or regulated financial adviser who will be able to help you find the best annuity product for you, with potentially wider benefits for your spouse or loved ones included too.
“Either way, be sure to shop around for the best option as opposed to accepting your existing insurer’s offer as the decision to purchase an annuity is irreversible.”
