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ABI annuity rate figures show up to 30% disparity between providers
by Daniel Grote on Aug 21, 2013 at 08:17
The Association of British Insurers (ABI) has published example annuity rates offered by its members for the first time, claiming the move will help savers better shop around during retirement.
The figures show example rates for 12 customer profiles. The ABI said it was not designed to serve as a price comparison service, but to show what was available on the market.
It has highlighted the wide disparity, of up to 30%, in rates offered by different providers. For a 65-year-old with no health problems living in the Manchester area and buying an annuity with £18,000, he would receive £1,099.92 a year from Reliance Mutual, the highest rate offered, but just £839.52 from Scottish Widows, the lowest rate.
ABI director general Otto Thoresen (pictured) said: ‘Increasing life expectancy and an era of low interest rates makes the need to secure an adequate retirement income greater than ever. The industry is determined to do all it can to help people make the right decision to secure the best possible pension.’
Stephen Lowe, member of the Pension Income Choice Association, said publication of the rates was a welcome step. ‘The new tables aren’t intended to be best buy tables but they will provide some strong indicators and valuable information to help journalists better inform their readers where the good, bad and ugly annuity rates can be found.’
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