- Average annuity rates increased by 2.4% in the second quarter of 20131 - Rates are up by 5.6% since December 2012 - In 3 years, rates have still fallen by 15%, meaning someone would need a pension pot worth 24% more today to generate the same annuity income as someone who retired three years ago2 |
The latest MGM Advantage Annuity Index reveals average annuity rates increased by 2.4% in the first quarter of the year, and overall up by 5.6% since December 2012. However, the retirement income specialist is warning that this good news is unlikely to be sustained due to the long-term pressures being felt by the annuity market. Aston Goodey at MGM Advantage comments: "Although this is good news, annuity rates have only recovered the ground lost in the second half of 2012. We are also not even close to the rates seen even just three years ago, meaning people approaching retirement will face some difficult decisions." MGM Advantage has calculated that someone retiring today will need a pension pot worth 24% more than someone who retired three years ago to generate the same income from an annuity. Aston continued: "There is a sting in the tail for people looking to generate an income in retirement from an annuity. You will need to have a pension pot worth 24% more than someone who retired three years ago to generate the same income." Commenting on annuity rate trends, Goodey said: "Although annuity rates are on the way up, all of the signs indicate that rates will continue to remain low for some time to come. The continuing pressures of Solvency2, improving longevity and low returns on gilts and bonds will continue to hamper any sustained recovery in rates. The market has found its feet following the introduction of gender neutral pricing, with providers more comfortable with the mix of business they can take on. With new players also coming into the enhanced market, we may see rates pushed up in the short term. But looking ahead to the longer term we are unlikely to reach the level of rates seen five years ago." |
|
|
|
Specialty GI Pricing Leader | ||
London - Negotiable |
Senior Life Actuarial Assoc or Direct... | ||
Bermuda - Negotiable |
Health Insurance Manager | ||
London/hybrid 2-3dpw office-based - Negotiable |
Principal Actuary - Bermuda | ||
Bermuda - Negotiable |
GI Pricing Analyst | ||
Wales / hybrid 2dpw in the office - Negotiable |
International Investment Manager | ||
Bermuda - Negotiable |
Financial Risk Leader - Bermuda | ||
Bermuda - Negotiable |
Risk Transfer Consultant | ||
Any UK Office location / Hybrid working, 2 days p/w in office - Negotiable |
Senior Life Actuarial Analyst | ||
South East / hybrid 3dpw office-based - Negotiable |
Investment Manager - Credit Risk & Re... | ||
South East / hybrid 3dpw office-based - Negotiable |
Actuarial Project Manager | ||
South East / hybrid 3dpw office-based - Negotiable |
Senior Associate - Trustee Pensions | ||
South East / hybrid 1-2dpw office-based - Negotiable |
STAR EXCLUSIVE: BPA Pricing Actuaries | ||
Flex / hybrid 2-3 dpw office-based - Negotiable |
Ceded Re Pricing Actuary | ||
London - £150,000 Per Annum |
Senior Actuary | ||
London - £180,000 Per Annum |
Financial Reporting in Reinsurance | ||
London / hybrid 2 days p/w office-based - Negotiable |
Home Insurance Director | ||
North West/Hybrid - £140,000 Per Annum |
Head of Long-tail Global | ||
UK/USA - £200,000 Per Annum |
Challenge the pensions industry! | ||
UK Flex / hybrid 2dpw office-based - Negotiable |
Pensions Data Science Actuary | ||
Offices UK wide, hybrid working - Negotiable |
Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.