The best and worst rates of guaranteed income for life solutions have widened to nearly 18%, Just Group has found, the highest in over four years.

Although the income available to retirees has increased, figures revealed by Just Group have found that switching from the least to the most competitive provider can deliver nearly 18% more income.

This is the equivalent of a 65-year-old in good health with a £50,000 pension, receiving £3,470 per annum (6.9%) income rather than £2,952 pa (5.9%), which is equal to more than £500 a year for the rest of their lives.

The FTSE-listed specialist UK financial services company has stated that this demonstrates the importance of “shopping around”.

Group communications director at Just Group, Stephen Lowe said: “Annuity rates have been ticking upwards again in recent months which is encouraging more retirees to consider investing their pension pot in a guaranteed income for life solution.

“But some providers are pricing far more competitively than others and the gap between the best and worst has widened to nearly 18% which is its highest for more than four years.”

In addition to these findings, the Association of British Insurers showed that more than £1bn of annuities were bought in the first three months of 2023.

Lowe added: “After many years working towards higher take-up, it is good to see the number exercising their ‘open market option’ right to shop around rising to 64% but that still means more than one-third are likely to be missing out on income.

“The easiest way to shop around effectively is to engage an annuity broker or a regulated financial adviser who can access all the latest prices on the market and suggest the most suitable options for each client in terms of spouse’s pensions, death benefits and inflation-protection.

“It is important retirees divulge their medical history and lifestyle factors because that can make a big difference to the amount of income on offer.

“Annuities are the only retirement solution that offer guaranteed income for life which removes investment and longevity risk. Retirees often like to know they are receiving a core flow of secure income that they can spend this month knowing more is coming their way next month.

“It also offers retirees more freedom in how they use any pension savings they have not turned into a guaranteed income.”

Share Story: