Jessica O'ConnorReturns available to pension savers on Guaranteed Income for Life solutions have set new highs throughout early 2025, figures from Just Group revealed.
The gains were particularly marked for older buyers where a healthy 70-year-old could now secure nearly
9% guaranteed income returns and a 75-year-old around 10%.
The returns could be higher still once lifestyle factors and health history have been taken into account.
Stephen Lowe, group communications director at the retirement specialist Just Group, said that that
the current attractive rates on offer were generating interest from retirees looking to lock in a good level
of monthly income they know will continue to be paid for the rest of their lives.
He said:“With guaranteed income rates at multi-year highs, it is worth retirees considering how an annuity could strengthen their overall financial planning.
“We know many older retirees are taking notice because if they can lock in the income they need, they are insulated against investment volatility in global financial markets.”
A healthy person investing £50,000 of pension cash in the top-paying single-life annuity would receive
annual income of £3,834 (a rate of just over 7.6%) at age 65, £4,331 (8.7%) at age 70, and £4,993 (10%) at
age 75.
The rates include a five-year period during which the income will be paid in the event of premature
death, which can be extended.
Lowe added: “The rates look particularly attractive when compared against so-called sustainable withdrawal rates from income drawdown, such as the famous ’4% rule’.
“Understandably, people like flexibility but they have to balance that against the cost.
“I think many people are realising that current rates will allow them to lock in the income they need, giving them both peace of mind but also more flexibility to invest, spend or give away other savings. By securing some income, you take away the need to build in a big safety margin in case things go wrong.”
Lowe explained that those wanting to investigate their annuity options should seek the help of a professional annuity broker or financial adviser to help select options tailored to their own circumstances and to find the best deals.
He added: “The rate offered is likely to vary quite significantly from the standard rates published, depending on your health history and lifestyle factors, the options you choose such as inflation-protection or continuing income to a spouse or partner.
“Providers change annuity rates frequently and it is unlikely your own pension company will offer the best
rate. It’s worth shopping around because finding the best deal can deliver thousands of pounds extra over the course of a long retirement.”
