Now there's even more reason to shop around for an annuity

11 February 2025

The difference between the best and worst-paying annuities grew sharply in January due to bond-market volatility, according to retirement specialist Just Group.

For those approaching retirement, this widening gap highlights the importance of finding the most competitive annuity rates. 

Just’s analysis shows that a 70-year-old could gain nearly 20% more income by choosing the best-paying provider over the worst. That equates to an extra £7,400 over ten years from a £50,000 pension pot. 

At age 65, the difference is still substantial at £4,380 over the same period – a 13% gap between the lowest and highest paying annuities.

What’s driving the widening gap?

Stephen Lowe, group communications director at Just Group, highlighted that annuity rates are heavily influenced by gilt and bond returns, which have been climbing.

“Guaranteed Income for Life (GIfL) pricing is influenced by the returns on gilts and bonds,” he said. “It’s a competitive market and annuity providers will be watching the changes, with some responding more quickly than others depending on commercial considerations.

“Current annuity rates are attracting a lot of interest from retirees wanting guaranteed income, but it is unlikely your own [pension scheme] provider will pay the most. Avoiding inferior rates requires disclosing health and lifestyle information that could push the rate higher and then shopping around for the best deal.”

Clearly, shopping around is vital, yet many retirees don’t know where to start – or perhaps anticipate the process being more complicated or arduous than it needs to be. This is where Retirement Line, as the UK's largest pension annuity broker*, can help.

How Retirement Line helps you secure the best annuity rates

With the annuity income gap at its widest point in years, Retirement Line’s dedicated team is here to help you navigate the annuity market, compare rates from the UK’s leading annuity providers and maximise your income.

But our service goes beyond securing the best annuity rate and income. Our Annuity Specialists also provide expert guidance to help you choose the right annuity for your needs. 

If you choose to go ahead with an annuity, our administration team handles all the paperwork, liaising with your pension scheme and your chosen annuity provider until everything is in place. Arranging your retirement income really couldn’t be simpler.

Please call our team of Annuity Specialists today on 0800 652 1316 or request a call back. You can also use our free annuity calculator to see how much income you could secure with an annuity.

Free guidance and support from Pension Wise

If you aren’t ready to arrange an annuity just yet, or want to explore your other options before deciding, remember you can take advantage of the free, impartial guidance available from the government-backed Pension Wise service. This can help you to understand all of the options available for your defined contribution pension fund. See our guide to Pension Wise for more information.

Source

The difference between the best and worst-paying annuities has grown sharply: Best and worst-paying annuity gap widens on bond-market volatility. Money Marketing. Accessed 06 February 2025.