Standard Life is increasing annuity rates for it’s own pension customers, it was announced this week. The increase will be offered to those customers who are enrolled in either the Active Money Sipp, Wrap Sipp and Pension Fund Withdrawal Plan. This is applicable to customers who have been with the company for 24 months or more. The company sent an email out to financial advisers acknowledging that some drawdown clients may have seen their income drop in recent times but that these higher annuity rats offered the chance of a secure and dependable future income. The company described the rates on offer as ‘market competitive’ and said this made it easy for customers to annuitise with them.
Alastair Black from the company says it is commonplace for existing drawdown customers to want to convert their funds into an annuity, but urged customers to seek independent financial advice before doing so. He said the company would continue to try to offer rates ‘around the top of market‘. Many income drawdown customers have seen their incomes fall due to lower gilt yields and a reduction in the amount of money they can withdraw each year, known as the GAD rate. Compulsory fund reviews have left many customers with a lower income level compared to when they took out the plan. At a time when inflation and prices are rising, many retirees will be attracted towards a competitively priced annuity as it means they can secure their income level for the rest of their retirement, without the fear of it falling back.
Annuity expert Billy Burrows said it was pleasing to see insurers rewarding the loyalty shown by existing customers.
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