February annuity rates on slow and steady rise

Annuity rates across the board have risen slightly over February, according to Alexander Forbes Annuity Bureau.

Its figures are based on a male annuitant aged 60 with a £100,000 pension pot.

Aviva had the best level rate in February, adding £20 to its annual rate of £6,170. Canada Life came second with £6,038, whilst Saga, despite raising its rate by £80 to £5,960, came third.

Aviva was also top for RPI linked annuities, lifting its rate by £10 to £3,590. Canada Life was second, having held its rate at £3,468, whilst Standard Life came third having held its rate at £3,332.

Meanwhile, smokers' rates have continued to rise, with LV= ahead of other providers offering £7,022, up £207 from January's rate. Reliance Mutual had second place with £6,721, and Aviva lifted its rate by £160 to come third with £6,460.

"It is good to see annuity rates continuing to rise, even by a small amount," says Gemma Goodman, head of operations at Alexander Forbes.

"However, proposed new EU equality legislation could have a huge downward impact on annuity rates as it would mean life insurers can no longer use a customer's sex to determine the cost of financial services despite the fact annuity rates are primarily built around mortality and statistically women are likely to live longer than men."