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Annuity income returns growth during 2022

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Rachel Springall, Press Officer
Rachel Springall, Press Officer / Finance Expert 01603 476210 Email Rachel
06/12/2022

Annuity income returns growth during 2022

Consumers have endured a turbulent year of interest rate volatility and stock market uncertainty, but those looking to retire will find annuity rates have improved. The latest analysis from Moneyfacts.co.uk reveals that annuity income stands at £898 more than in January 2022.

Annuity income returns growth during 2022

Consumers have endured a turbulent year of interest rate volatility and stock market uncertainty, but those looking to retire will find annuity rates have improved. The latest analysis from Moneyfacts.co.uk reveals that annuity income stands at £898 more than in January 2022.

  • Moneyfacts.co.uk data shows that the average annual annuity income has risen by £898 since the start of 2022, standing at £3,190 in December, up from £2,292 in January 2022.
  • The most notable peak over the past three months was seen during October, where on both the 17th and 24th, the average yearly income stood at £3,389, subsequently reducing at the start of November to £3,376, and edging down to £3,190 for December.

 

  • Moneyfacts.co.uk data shows that the average annual annuity income has risen by £898 since the start of 2022, standing at £3,190 in December, up from £2,292 in January 2022.
  • The most notable peak over the past three months was seen during October, where on both the 17th and 24th, the average yearly income stood at £3,389, subsequently reducing at the start of November to £3,376, and edging down to £3,190 for December.

 

Average annual annuity income

January 2022

£2,292

June 2022

£2,710

July 2022

£2,881

August 2022

£2,824

September 2022

£2,892

October 2022

£3,236

November 2022

£3,376

December 2022

£3,190

Annuity figures based on an annuitant aged 65 buying a single life level without guarantee annuity for a £50,000 purchase price.

Source: Moneyfacts.co.uk

Average annual annuity income

January 2022

£2,292

June 2022

£2,710

July 2022

£2,881

August 2022

£2,824

September 2022

£2,892

October 2022

£3,236

November 2022

£3,376

December 2022

£3,190

Annuity figures based on an annuitant aged 65 buying a single life level without guarantee annuity for a £50,000 purchase price.

Source: Moneyfacts.co.uk

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“This year has been turbulent for many, with interest rate uncertainty, stock market volatility and a cost of living crisis hitting consumers from every direction. Those looking to retire may be surprised to find annuity rates have improved, so those who decide to annuitise could be hundreds of pounds better off than if they retired at the start of 2022.

“Despite an improvement to the average annual annuity income, retirees may well opt for drawdown due to the flexibility. Those who remained fully invested in a pension would likely note the impact made on pots during the stock market volatility in 2022. As is ever the case, consumers would be wise to go over their retirement options with an independent adviser. Should someone’s circumstances change, whether due to a deterioration of health or a change in attitude to risk, an annuity may be a suitable choice providing a guaranteed income during retirement, but this would depend on future annuity rate pricing. Indeed, choosing part annuity and drawdown may suit those who desire a bit of flexibility but also a set income that a lifetime annuity can offer.

“The cost of living crisis may well be a concern for many approaching retirement, so it is essential to consider all the options available that could plug any retirement shortfall. Consumers who still have some time before they retire could consider opening a Lifetime ISA for a Government 25% boost on their savings, but others nearing retirement may consider equity release. However, the decision to release equity from a home requires careful thought, particularly its impact on inheritance.”

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:

“This year has been turbulent for many, with interest rate uncertainty, stock market volatility and a cost of living crisis hitting consumers from every direction. Those looking to retire may be surprised to find annuity rates have improved, so those who decide to annuitise could be hundreds of pounds better off than if they retired at the start of 2022.

“Despite an improvement to the average annual annuity income, retirees may well opt for drawdown due to the flexibility. Those who remained fully invested in a pension would likely note the impact made on pots during the stock market volatility in 2022. As is ever the case, consumers would be wise to go over their retirement options with an independent adviser. Should someone’s circumstances change, whether due to a deterioration of health or a change in attitude to risk, an annuity may be a suitable choice providing a guaranteed income during retirement, but this would depend on future annuity rate pricing. Indeed, choosing part annuity and drawdown may suit those who desire a bit of flexibility but also a set income that a lifetime annuity can offer.

“The cost of living crisis may well be a concern for many approaching retirement, so it is essential to consider all the options available that could plug any retirement shortfall. Consumers who still have some time before they retire could consider opening a Lifetime ISA for a Government 25% boost on their savings, but others nearing retirement may consider equity release. However, the decision to release equity from a home requires careful thought, particularly its impact on inheritance.”

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

Notes to editors

Pioneering financial comparison technology for over 35 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfactscompare.co.uk is the financial product price comparison site, launched as Moneyfacts.co.uk in 2000 and rebranded to Moneyfactscompare.co.uk in 2023, which helps consumers compare thousands of financial products, including credit cards, savings, mortgages and many more. Unlike other comparison sites, Moneyfactscompare.co.uk shows whole of market data regardless of commercial bias, showing consumers a true picture of the best products based on the criteria they select.

We hope you find this press release insightful. We would appreciate a link back to Moneyfactscompare.co.uk if you decide to source this information.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room.

 

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Rachel Springall Press Officer / Finance Expert
Caitlyn Eastell Apprentice Press & PR Assistant