Data released by Alexander Forbes Annuity Bureau shows men’s single life annuity rates have fallen at the half-year mark as overall rates plunged further.
Annuity rates for men went down on an average, the research showed, with Aviva reducing rates to £6160 for a year of life annuity with £100,000. This is a drop of £30 over last month’s rate.
Canada Life also reduced its rate by £141.84 over last month to £5877.60 and fell to the third place from second spot on the bureau’s table.
“As we reach the half-year mark, annuity rates continue the downward trend of recent months. However when compared to rates at the start of the year, the picture is much more mixed”, said Gemma Goodman, head of operations at Alexander Forbes Annuity Bureau.
“For a 60-year-old male buying a single-level life annuity with a £100,000 pot of money, Aviva has increased its rate by £10 since January, while Canada Life has cut its rate by a whopping £160.92”, she added.
However, Legal & General bucked the trend and increased its rate to £5894.40, a hike of £18 which helped it move up to the second spot.
Surprisingly, Retail Price Index (RPI) linked annuities also went down compared to rates offered in May.
Though Aviva again topped the chart as the most preferred RPI linked annuities provider, still its rates were down by £30 for men to £3580 on yearly basis.
Canada Life managed to secure the second spot with £3391.80, a drop of £58.32 over last month while Standard Life maintained its third position from the top with an unaltered rate of £3332.40 for each year.
“The trend seems to be that annuity rates are falling. That is because people are living longer and interest rates are lower”, said Matthew Rich, IFA at Alan Seward Financial Services.
“If you want certainty of income then annuities are the way to go. But if you want to generate a high income, then annuities will not give you that at the moment”, he added.