FTAdviser.com

Advertising

According to the latest figures from Alexander Forbes Annuity Bureau, the best level escalation annuity rate for a 60-year-old male making a £100,000 purchase jumped from £6,780 to £7, 010 in the month to 1 May.

Norwich Union and Legal & General offer the most competitive annuities. Norwich Union offered the best rates for both single and joint lives level annuities at the start of May, while Legal & General offers the most competitive range across the board for inflation-linked annuities.

Director of the Alexander Forbes Annuity Bureau David Marlow said: "It's a good time to retire if you're seeking the best annuity income with rates at their highest for many months.

"The credit crunch has depressed the value of corporate bonds, increasing yields and allowing annuity providers to pass on the benefit to retirees as higher income on level annuities."

However, the study by Alexander Forbes revealed that smokers and RPI-linked buyers continue to miss out, with rates for both remaining stable.

The best rates for retirees seeking inflation protection remained unchanged at £4,065.48 from Legal & General (based on RPI escalation for a 60-year-old male with a £100,000 purchase).

The best smokers rate was also unchanged at £7,808.40 from Reliance Mutual (based on level escalation for a 60-year-old male smoker, with a £100,000 purchase).

Marlow added: "While rates for inflation-linked annuities have not improved to the same extent there are many opportunities for people to benefit from higher income and protect themselves against the ravages of inflation by combining level and investment-linked annuities.

"People approaching retirement shouldn't be fooled into thinking the current excellent rates will last however. With longevity increasing the long term trend for annuity rates is likely to turn back down."