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Best Annuity Rates 2014

Compare the open market to get the best annuity rates.

There are sizeable differences between the best and worst performing annuities. By shopping around for the top annuity rates you can receive up to 35% more income in your retirement, according to the FSA.

Get started: Compare rates now using our annuity calculator (April 2014 updated).

Annuity Rates April 2014 – Latest Outlook:

Annuities rates boosted by record increases

The FSA estimate you could get up to 35% more income by shopping around for your annuity.


Despite much of the negative media coverage to the contrary, 2013 was a very good year for annuities, relatively speaking.

2013, to the surprise of many analysts, was a great year for annuities. After years of tumbling rates and bleak outlooks for retirees, prices saw ‘record increases’.

In March, the situation did not look so rosy: prices were at all-time lows, largely due to money printing by national governments in Europe and North America. However, by year end retirees could expect a 10% increase in the money they would receive from their pension pot, compared to at the start of 2013.

Such an increase is the biggest seen since 1994 and welcome news for perplexed retirees, who have had to see the value of their pension pots diminish steadily over the last decade.

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Each year, people buying annuities throw away £1 billion in pension income by failing to shop around.

Whatever you do, shop around otherwise you could regret it for the rest of your life.



Much of this increase was fueled by higher returns on the government gilt market.

Annuity providers invest pensions funds into government gilts, receiving a return on these highly secure investments which in turn influences the rates they are able to offer retirees.

Starting earlier this year but particularly accelerating in the second week of August, gilt returns have increased encouragingly. In the month of August, we saw yields go from 3% to 3.35% triggering all of the UK’s major annuity providers to put up rates.

The same affect was seen on enhanced annuities, which saw across the board increases in rates.

Annuity Rates predicted to rise, but proposed EU laws mean retirees should seek advice now

Annual returns on annuities have been falling for decades due to increasing life expediencies and, most recently, suppressed government gilt yields. However, a forecasted pick up in the global economy could lead to increased bond yields which would increase annuity returns.

“We expect long gilt yields to be on a rising trend over the next couple of years,” Andrew Belshaw, Head of UK investment at Western Asset told The Telegraph.

It was originally unclear, however, whether annuity providers would be quick to pass on these higher returns in the form of better annual returns to customers. Fortunately, consumers did see the benefits of increased gilts reflected in better annuity rates on offer.

Retirees and savers must act now to protect retirement incomes

Retirees and savers should speak to a financial advisor immediately to be ensure that they are well prepared to get the maximum income in their retirement.

You can find a local, qualified advisor through the Financial Advisor Network, a nationwide network of independent IFA firms here.

2013′s annuities rates were suppressed to all-time lows. However, it is unlikely that we will see significant changes to this situation any time soon as the biggest suppressing factor is increasing life expectancies, which currently show little signs of reversing.

Further potential threats to retirement incomes, including the aforementioned quantitative easing policy of the UK government, mean it is extremely important that you talk to a financial advisor about you own unique situation and plans as soon as possible.

Is 2014 the time to buy?

Top annuity rates look as attractive as ever since 1994 so for many this may be a good time to buy. Of course, many other factors must be considered and speaking to an IFA first is highly advisable.

Frankly, low rates on annuities look like they are here to stay and the recent increases could be short lived so acting now may be wise.

The most suitable option will always vary from person to person, dependent on their own unique personal and financial situation, hence the need to speak to a Financial Advisor.

Shop around for the best uUK annuity rates in 2014

To get an idea of the best plans available to you, you can use our annuity calculator (April 2014 updated).

The Golden Rule: Exercising your Open Market Option

Did you know that 65% of Britons still buy their annuity plan from the provider that they first opened their pension plan with?  (Source: Reuters)

The single most important thing you must do when you are planning to buy an annuity income with your pension pot(s) is to compare the entire market for the best options – this is what is known as the Open Market Option (OMO).

There are sizeable differences between the rates offered by the various annuity providers – this is why it is so crucial to exercise the Open Market Option.

Unfortunately, many people are not aware that they can select from any annuity provider. The unfortunate truth is that this lack of awareness will have cost the vast majority of annuitants’ up to 35% of their potential retirement income.

Do not allow this to happen to you or the people you care for. Get the maximum retirement income by exercising the Open Market Option.

Getting independent financial advice

Remember; there isn’t a ‘one-size-fits-all’ best option. Financial planning is very individualized to your own unique circumstances, from your demographic factors to your tax and assets position. Only a qualified IFA can help you here.

Click here to find a local, qualified IFA through the Financial Advisor Network, a nationwide network of IFA firms.

Use the instant annuity calculator here to find out what you sort of income you can expect from your pension annuity and to access free, no-obligation independent financial advice.

By Geoff Alderton – Last Updated: 7th Apr, 2014

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