Annuity rates fall over the past three months


The latest figures from the MGM Annuity Index show that Annuity rates have fallen over the past three months.

The average rates for Conventional Annuities fell by 0.18% in the three month period to June 2011; rates for Enhanced Annuities fell by 3.5% over the same time period.

The Annuity Index was launched in June 2009 and since then Annuity rates have fallen six out of the seven times it has been updated.


Recent rises in inflation coupled with falls in Annuity rates have meant that the “real” return on Annuities has fallen faster over the past few months than was previously the case.

In June the average Conventional Annuity rate was 1.04% higher than RPI (Retails Prices Index). In December last year the difference was significantly greater at 3.87%. For Enhanced Annuities the figures for the same periods of time are 2.06% and 5.3%.

Annuity rates comparison

Shopping around for an Annuity is always recommended and the MGM Annuity Index emphasises this.

The difference in income paid between the top 25% and bottom 25% of Conventional Annuity providers is 15.99% for men rising to 17.05% for women. For Enhanced annuities the difference is wider at 18.85% for men and 17.87% for women.

Using a Pension Annuity Calculator can help to differentiate between the top paying Annuity providers and those whose rates are not so competitive.


The figures provided by MGM Advantage demonstrate the pressure people are under in retirement with smaller pension funds, lower Annuity rates and increased life expectancy.

Craig Fazzini-Jones of MGM Advantage, said “As people live longer, the long-term outlook for Conventional and Enhanced Annuities is one of overall falling rates”

He continued, “This makes it all the more important to shop around for the best deal when buying an annuity as the difference between the best and worst rates can be huge.”