Lifetime annuity rates have continued their upward trajectory in 2024 showing consistent improvement across all age groups, according to the latest Standard Life Annuity Rates Tracker.
According to the data, the rate for a healthy 60-year-old increased from 6.16 per cent in January to 6.38 per cent in June, and for a healthy 70-year-old, it increased from 7.64 per cent to 7.91 per cent. This translates to yearly salary gains of £127 for a 60-year-old, £182 for a 65-year-old, and £123 for a 70-year-old.
A 65-year-old man purchasing an annuity at 7.08 per cent in June 2024 can expect a total lifetime income of £142,374, while a woman can expect £157,958. A healthy 70-year-old earning 7.91 per cent would receive £125,835 for men and £141,664 for women.
By June 2024, a healthy 60-year-old could expect an annual income of £6,381 at a 6.38 per cent rate, while a healthy 70-year-old could expect £7,914 at a 7.91 per cent rate, a difference of £1,533 on a £100,000 pension account.
Standard Life head of annuities Pete Cowell says: “It’s welcome to see that annuity rates have enjoyed a slow but steady improvement throughout the first six months of the year. While rate improvements are welcome news, the main benefit of an annuity is that it delivers income certainty in retirement, something which 92 per cent of people say they want, according to Standard Life’s Retirement Voice1study.
“While income certainty is important, people want to feel in control of their finances. For many, a blended approach often proves more beneficial, incorporating annuities as part of a broader solution. Rather than simply deciding whether to annuitise, people should consider how much of their retirement savings they could use to buy an annuity, as well as what age best suits them, and keep this under review if circumstances change, especially since annuity rates typically improve as you age.”
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