The demand for annuities is at its highest level in years as a result of rising interest rates, with Legal & General Retail reporting a 67 per cent increase in quote requests from June 2022 to June 2023.
According to L&G research, a 66-year-old individual in possession of a pension fund amounting to £100,000 can now secure an annuity offering an annual income of £6,790. This represents a notable surge of £842 compared to the figures recorded in the same period last year.
The most advantageous and least advantageous annuity plans now available are significantly different, according to data from Annuity Ready, an annuity comparison site. Notably, those 66 years old with pension funds totalling £100,000 are subject to rate variations that might reach 9.1 per cent. This translates to a significant difference in potential earnings of £622 per year, which over the course of the typical retirement period would total an impressive £14,928.
Legal & General Retail managing director of retail retirement Lorna Shah says: “In recent months there has been a significant increase in focus on annuities, not least as a result of rising rates, which as our data shows can have a very real impact on the income of someone who has purchased an annuity.
“However, despite the record rates, this should be part of a wider discussion and is only one aspect of the value annuities can offer. Annuities continue to be a good option for people who want peace of mind and the assurance that comes with a guaranteed income for the rest of their life.
“If you are considering an annuity, it’s important to look at all your options carefully and make sure you’ve had all the advice and guidance you need before deciding what the right choice is for you. As our research shows, it is really key to shop around to make sure you are getting the best deal. For people looking to research their own annuity the award-winning Annuity Ready website compares rates across the whole market.
“It will point you towards the best income you can get, even if it’s not with Legal & General. Alternatively, you can also consult a financial adviser to explore rates and your available options, or come directly to Legal & General.”
The post Rising interest rates spark years-high surge in annuity demand: L&G appeared first on Corporate Adviser.
