The following shows standard pension annuity rates or try; With Profits annuity for the highest income possible; impaired life annuity if you are a smoker or suffer an illness; purchased life annuity if you have a lump sum. The annuities rates table is only a guide as rates change frequently. Please request a free annuity quote for an accurate income for you. comparing like for like? If you are comparing our free annuity quote to the illustration you have received from the existing provider, please remember to make sure the annuity details are exactly the same. Any difference could mean our quote figures can be improved when compared like for like with your provider's illustration.   • annuity rates • annuity protection     • single rates • specialist advice     • joint rates • effect of inflation     • 12-month trend 2008 • added feature costs     • future trends • annuity charges

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annuity rates table
These rates tables are for standard healthy annuitants. For other rates try;
smoker rates
diabetes rates
impaired rates
immediate needs rates
with profits rates
purchased life rates


SINGLE LIFE - standard

Fund size: £100,000 (after taking £33,333 tax free cash)

The following pension annuity rates table shows the best open market option income for a compulsory purchase annuity. The original pension fund is £133,333 and after the tax free lump sum has been taken, £100,000 is used to purchase an annuity.

The annuity is paid monthly in arrears and compared on a level annuity, 3% escalation, and level with 10-year guarantee basis for single males and females from the ages of 50 to 74 years. No medical enhancements are included in these rates.

Last updated: 22 April 2008

Key - Annuity Rate Changes

Latest rates higher than 12 months ago   Latest rates lower than 12 months ago   £ Difference in pounds sterling (per annum)   % Percentage change from 12 months ago   nc No change

standard - level annuity
male £ %     50 396 7.4     55 372 6.4     60 360 5.7     65 336 4.7     70 348 4.2     74 348 3.6	female £ %     50 480 9.2     55 408 7.3     60 312 5.2     65 324 4.9     70 336 4.4     74 408 4.8
Annuity table - the annuity rate changes are based on £100,000 in January 2008 compared to January 2007. For an annuity rate specific to your circumstances you should complete the free annuity quote.

standard - level annuity, 50% spouse

£ %     male 50 and female 50 444 8.6     male 55 and female 55 360 6.6     male 60 and female 60 348 5.9     male 65 and female 65 336 5.2     male 70 and female 70 300 4.1     male 74 and female 74 312 3.7

Annuity table - the annuity rate changes are based on £100,000 in January 2008 compared to January 2007. For an annuity rate specific to your circumstances you should complete the free annuity quote.

For example, for a 65 year old male with a single life annuity with a level income of £10,000 per year, a 3.0% rate of inflation will reduced the buying power of this money to £7,440 per year in real terms by the time he is 75 years old. If he lives to this age, the mortality statistics expect he can live for another 12 years, to 88 years of age. By then this income is going to be worth only £5,067 per year in real terms. If inflation rises above 3.0% on average, his income is going to be even lower.

However, the annuitant must remember that an annuity with RPI escalation reduces the initial pension income received, so for a 65 year old male given 3.0% inflation it would take almost 11 years before the income matches the level annuity, or considerably longer, almost 20 years to match the cumulative income paid.


Added feature costs
The annuitant can add extra features to a pension annuity depending on their requirements. The following table shows the costs associated with a number of main features, assuming that the annuitant and spouse are 65 years old, the income is on a level annuity basis paid monthly in arrears, no guaranteed period included and is without proportion. The cost of the added features will reduce £1,000 of pension income per year by the stated amounts.

For example, the cost to a female of adding a guaranteed period of 5 years will be £6, reducing her income from £1,000 per year to £994. For a male the cost would be £8, reducing his income from £1,000 per year to £992. This difference is due to the fact that male life expectancy or mortality is shorter than for a female and therefore represents a higher risk for claiming.

Also, for a female the cost of a 50% survivors pension is £77, reducing her income to £923 per year whereas for a male this is £140, reducing his income to £860. The difference is due to the fact that it is more likely a female will outlive her spouse and therefore the risk to the insurance company is higher where the annuitant is the male.


Annuity charges
By purchasing an annuity through an open market option, the current pension fund provider may make an administrative charge. However, the extra income secured far outweighs such costs. The other consideration is what costs are there from the new provider of the annuity.

To a certain extent this is not a consideration because when an annuity is purchased for the highest possible income, the capital now belongs to the insurance company. In general, the insurance company take 4% from the capital and this represents a charge for administration and to cover the distribution costs.

The distribution cost include such things as advertising, direct sales force or an intermediary such as an independent financial adviser (IFA) with an annuity and pension bureau, for selling their products and this is accounted for in the annuity quotes provided. Typically this cost is between 1.0% and 1.3% of the purchase price of the annuity.

Nevertheless, the extra income secured by an open market option, taking into account of all the cost, can be as high as 30% compared to the offer made from the existing pension provider. Many people buying an annuity direct are paying this charge on an execution only basis. This means that if it turns out the annuity is not appropriate, they have no option for complaint as they have effectively advised themselves.

Specialist advice from an IFA with protection provided by the Financial Services Authority (FSA) should be sought, as this will be paid for by the insurance company out of their distribution cost.

Annuity protection