News release: Annuity rates remain stable in first six months of 2024

13 June 2024

For immediate use

• Annuity rates remain stable, with a small increase across the past six months.

• Examples include a 5% increase for a male aged 65 with a £100,000 pension fund 

• Equivalent to an annual income increase of £365 and average lifetime income increase of £6,693.

Data from leading annuity broker Retirement Line confirms that annuity rates have been largely stable over the first six months of 2024, largely due to predicted cuts in the Bank Rate failing to materialise.

Retirement Line’s latest six-month annuity rate report shows that the rate for a healthy married male aged 65 taking a single-life annuity rose by approx. 5.17% in the period January to June 2024 – an increase from 7.16% to 7.53%.

Annual income from an annuity bought with £100,000 of pension savings over that period for the same individual rose from £7,162.68 to £7,528.44. 

This means that when buying an annuity in early June, they would have enjoyed additional annual income of £365.76 compared to buying the same annuity six months previously. 

Based on average life expectancy of a further 18.3 years, that’s £6,693.40 of additional lifetime income.

This data is based on quotes from the UK’s leading open market annuity providers via Retirement Line’s in-house quote system.

Rate increases differ for other customer and product scenarios, but Retirement Line report that the general trend has been for modest rate increases across the board.

Mark Ormston, Retirement Line’s Director of Propositions, says: 

“The slight increase in average annuity rates over the past six months, in part, stems from improvements in the UK mid-term gilt market.

“At the end of 2023 and the beginning of 2024, UK gilts fell slightly with many anticipating the Bank of England’s Monetary Policy Committee to cut the base rate in the first quarter of 2024. 

“With no base rate cuts so far this year, and the next MPC meeting taking place during the election period, we may not see any cuts until the end of Q3. Naturally, nobody knows for certain when the MPC may vote to cut the base rate and there are multiple factors which make up annuity rates.

“For now, at least, the slight uptick in annuity rates since the beginning of the year is good news for anyone currently looking to turn some or all of their pension savings into guaranteed income through an annuity.

“For anyone considering an annuity purchase, playing a guessing game about when annuity rates might peak can be a dangerous one. People should weigh up all kinds of factors about when to buy an annuity. When it comes to securing the best annuity rate, people should ensure they have disclosed accurate health and lifestyle information and have shopped around on the open market.”

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Press enquiries:

Mark Ormston  

Mobile: 07581 153270

mark.ormston@retirementline.co.uk

Notes to editors:

Retirement Line is a specialist pensions annuity intermediary offering guidance and support to help retirees secure the best income available from the UK’s leading annuity providers. Based in Peterborough, the company is authorised and regulated by the Financial Conduct Authority.