Annuity levels have been unaffected by the turmoil in the global economy so far with some providers even lifting level rates slightly. The top level rate from Norwich Union rose by £60 to £7,100 making up some of its rate cut of £110 last month. Canada Life also improved its level rate by £73 to £7071 to take second spot in the tables.
It also reports that over the last 12 months level rates have improved considerably with the best level rate on offer in October 2007 being £6,765 from Scottish Equitable, £335 lower than today’s best rate from Norwich Union. Inflation linked rates have gone in the opposite direction over the last year as inflation has increased.
In addition, the best smokers’ rates were unchanged in October with Reliance Mutual remaining top of the table at £8,024 a year.
Commenting, Alexander Forbes Annuity Bureau’s director David Marlow, says: “With economic doom and gloom in the headlines, it is good to be able to report some good financial news. Following rate cuts last month, we have again seen a few small increases in level annuity rates as we enter October, putting level rates some five per cent higher than they were in October last year.”
However, he adds that: “Unfortunately, it is likely that we are at or close to the end of the upward run for level rates. The signs were there last month when many providers cut rates and with the next movement in interest rates likely to be down, to try to boost the economy, it is hard to see level annuity rates maintaining these levels in the long term”.