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Pension annuity rates hit a two-year high

Pension annuity rates hit a two-year high

There's good news if you are considering using an annuity to secure all or some of your retirement income.

Annuity rates have improved considerably since falling sharply following the Brexit vote. Recent reports state that annuity rates have increased 19% over the past two years and are now at or near pre-referendum levels¹.

This is positive news for the 60-80,000 people each year who the Financial Conduct Authority estimate are choosing an annuity².

Your Pension Options

An annuity is one of several options you have when turning your pension into a retirement income.

Since April 2015, the 'pension freedoms' provide you with more options when taking your pension. Many people take their 25% tax-free cash entitlement from their pension, after which their options are to:


  • buy an annuity to provide a guaranteed income for life that's unaffected by investment performance
  • take the whole pension pot as cash (with the first 25% being tax-free)
  • take smaller cash sums from the pension (with the first 25% of each withdrawal tax-free)
  • get a flexible income (called 'income drawdown' or 'flexi-access drawdown') where the pension savings remain invested to provide an income, which may rise or fall depending on investment performance
  • mix the options.

Explore Your Options

If you're unsure of what to do with your pension, arrange an appointment with a local Wesleyan Financial Services Consultant, who can help you to fully understand your options, including whether an annuity could be right for you.

To arrange a no-obligation appointment at a time and location to suit you, call us on 0800 975 0140 or email: financialreview@wesleyan.co.uk

¹ Source: https://www.moneywise.co.uk, September 2017
² Source: Financial Conduct Authority Retirement Outcome Review Consultation Paper CP18/17, June 2018.

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