Annuity rates rise suggests market recovery may have begun

Annuity rates have had their first monthly rise since the bombshell Budget announcements, new figures have shown. Number crunchers at the My Pension Expert website said the data seems to indicate that the rates are in recovery.Annuities have taken a major knock since George Osborne's reforms were laid out, even leading to some firms cutting jobs due to anticipated falls in sales.As a reaction to the Budget rates began to slide during April, with My Pension Expert recording a -0.217% fall in the best standard annuity rate and a -1.323% drop in the best annuity for someone who is classed as obese.{desktop}{/desktop}{mobile}{/mobile}This worsened with significant drops during May but in June this downward spiral has been halted, the website reported.This month MPE has observed a number of increases in the rates. The standard annuity rate has gone up by 0.603%, the enhanced annuity rate by 0.592%, the smoker rate by 1.367%, the obese rate by 0.951% and the drinker by 3.325%. This works out at an extra £36, £42, £94, £61 and £209 respectively and was the first time since the Budget announcement that all five rates have increased during a calendar month.Scott Mullen, director at My Pension Expert, said: "These findings show that the annuity market is starting to recover from what has been a very trying few months."No-one expected the degree of change that came with the Budget announcement and its revolutionary rather than evolutionary nature caught everyone off-guard."This month's improvements could be the result of a number of factors such as the slight improvement in gilt yields which are intrinsically linked to annuity rates, or providers could be trying to entice consumers back into the market having seen their sales figures fall dramatically."Whatever the reason it is clear that it's the consumer that's benefitting, as higher rates mean greater income."

Annuity rates rise suggests market recovery may have begun

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