Pension annuity rates drop, says Moneyfacts

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Pension annuity rates drop, says Moneyfacts

Mon 7th Dec 2009

The annuity rates on pensions have dropped to their lowest level ever, according to Moneyfacts.

Rates have fallen steadily over the last two months, after they had remained stable during the summer.

For a male looking to purchase a level without guarantee annuity, based on a price of £10,000, the rates have dropped by 3.3 per cent. This is a fall of 10.8 per cent on a year ago.

For a woman in the same circumstances, the decline has been 3.6 per cent, bringing the level of annuity for a woman to 11 per cent less than it would have been this time last year.

Richard Eagling, editor of investment, life and pensions at Moneyfacts, said: "Since the purchase of an annuity is a one-off transaction, it is vital that consumers shop around for the best deal for their money."

The financial website reported last month that the variable rate on a savings account had fallen by 10.1 per cent on average in the last year, although the Bank of England base rate had remained the same since March.

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