Accessibility Statement Skip Navigation
  • Resources
  • Blog
  • Journalists
  • +44 (0)20 7454 5110
  • Client Login
  • Send a Release
Return to PR Newswire homepage
  • News
  • Products
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
  • News in Focus
      • Browse News Releases

      • All Public Company News
      • All Multimedia News
      • View All News Releases

      • Regulatory News

      • D/A/CH Regulatory News
      • UK Regulatory News
      • View All Regulatory News

  • Business & Money
      • Auto & Transportation

      • Aerospace & Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads & Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking & Road Transportation
      • View All Auto & Transportation

      • Business Technology

      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • View All Business Technology

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film & Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Financial Services & Investing

      • Accounting News & Issues
      • Acquisitions, Mergers & Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalisation
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • View All Financial Services & Investing

      • General Business

      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Overseas Real Estate (non-US)
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls & Research
      • Trade Show News
      • View All General Business

  • Science & Tech
      • Consumer Technology

      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • View All Consumer Technology

      • Energy & Natural Resources

      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil & Gas Discoveries
      • Utilities
      • Water Utilities
      • View All Energy & Natural Resources

      • Environ­ment

      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • Aerospace & Defence
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation & Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking & Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • Carriers & Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • Animals & Pets
      • Beers, Wines & Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics & Personal Care
      • Fashion
      • Food & Beverages
      • Furniture & Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewellery
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • Advertising
      • Art
      • Books
      • Entertainment
      • Film & Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • View All Entertain­ment & Media

      • Health

      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • View All Health

      • Sports

      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • View All Sports

      • Travel

      • Amusement Parks & Tourist Attractions
      • Gambling & Casinos
      • Hotels & Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • Animal Welfare
      • Corporate Social Responsibility
      • Economic News, Trends & Analysis
      • Education
      • Environmental
      • European Government
      • Labour & Union
      • Natural Disasters
      • Not For Profit
      • Public Safety
      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • View All People & Culture

  • Overview
  • Distribution
  • Paid Placement
  • Multimedia
  • Disclosure Services
  • SocialBoost
  • Rooms
    • MediaRoom
    • ESG Rooms
  • AI Tools
  • General Enquiries
  • Media Enquiries
  • Partnerships
  • Hamburger menu
  • Cision PR Newswire UK provides press release distribution, targeting, monitoring, and marketing services
  • Send a Release
    • Phone

    • +44 (0)20 7454 5110 from 8 AM - 5:30 PM GMT

    • ALL CONTACT INFO
    • Contact Us

      +44 (0)20 7454 5110
      from 8 AM - 5:30 PM GMT

  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • News in Focus
    • Browse News Releases
    • Regulatory News
  • Business & Money
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
    • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • Overview
  • Distribution
  • Paid Placement
  • Multimedia
  • Disclosure Services
  • Cision Communications Cloud®
  • AI Tools
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists
  • General Enquiries
  • Media Enquiries
  • Partnerships
  • Client Login
  • Send a Release
  • Resources
  • Blog
  • Journalists

Annuity Index Reveals Gulf in Rates


News provided by

MGM Advantage

14 Jul, 2014, 14:24 GMT

Share this article

Share toX

Share this article

Share toX

WORTHING, England, July 14, 2014 /PRNewswire/ --

  • Gap between the top quartile enhanced rate and bottom quartile standard annuity is 30% 
  • Difference in rate equates to £17,000 in missed income over average retirement[1]

The latest Annuity Index[2] from retirement specialist MGM Advantage reveals the gulf in rates between the top enhanced rates and bottom standard rates is 30%. The Index also shows the average annuity rate has fallen in the second quarter of 2014, by 0.72%. The average standard annuity rate increased slightly (up by 0.42%) while the average enhanced rate fell by 1.64%.

Aston Goodey, sales and marketing Director, MGM Advantage, said: 'For people looking for a sustainable retirement income this data shows it always pays to shop around when looking for your retirement income. People who don't shop around could be missing out on thousands over the course of their retirement.

'We are seeing the emergence of two distinct markets for annuities, with, for the first time, prices going in opposite directions for standard and enhanced rates. This divergence in rate could be down to any number of factors, including the different types of assets providers use to back their books for both standard and enhanced products, as well as tactical pricing decisions.

'It is a tricky time for advisers and their clients, who are perhaps still wondering what to do following the radical Budget proposals. We need to get back to basics and understand what annuities can provide clients. If you are looking for a product to provide a retirement income for life, then an annuity is in the unique position of being able to provide 100% security for that income. Put simply, no other financial product is able to provide insurance of outliving your retirement savings.

'We know that for many people the freedom and access available from next year will be hugely appealing, but, if your objective is to convert pension savings into retirement income, then an annuity is still the product with a guarantee attached that it will continue to pay income however long you live.

'If people are watching and waiting to see what will happen next year before making any decisions, and their primary driver is a sustainable income, then our view is we will not see a treasure trove of new product innovation providing anything different from what is on offer today.'

Future annuity rates 

Commenting on the future for annuity rates, Aston Goodey said: 'The market has already felt some pretty hefty punches, most of which meant downward pressure on rates. The light at the end of the tunnel was the positive impact of future increases in interest rates and subsequent impact on gilt yields, which should help to push rates up.

'However, the Budget changes these dynamics considerably. When demand for product falls, then prices tend to rise. We might also see the type of people who traditionally bought annuities change. People with smaller pots may take the money as cash, while people with longer life expectancy might secure an income through an annuity. The net effect on the annuity pool could be to put further pressure on rates. Although we haven't felt the full effect of the changing market dynamics, annuity rates are likely to flat line for a while yet.'

    What we already knew      Market impact
    Solvency 2                <    Solvency 2 pushing all annuity rates down
    Increasing longevity      <    People living longer pushing down rates
    Growth of enhanced market <    Gap between standard and enhanced rates
                                   30%
    Gilt yields               >    If yields increase, rates could improve.
                                   Continuing issues include euro debt and QE
                                   unwind, as well as interest rates
    Impact of the Budget Market impact
    Supply and demand    <    Supply falls which means prices rise
    Selection            <    Many future annuity buyers may be people
                              more likely to live longer
    Competitive pricing  >    In competitive parts of the market, prices
                              may get keener as providers seek market
                              share

Average annuity rates  

                                 Average
               Average standard  enhanced
    GBP50,000  annuity           annuity             Difference over
    pension                                             average
    pot        (per year)        (per year) % diff     retirement
                                                      GBP11,067 men
    Gender
    neutral     GBP2,886          GBP3,413    18%     GBP12,648 women

Standard annuities  

                             Bottom
    GBP50,000  Top quartile  quartile                 Difference over
    pension    average rate  average rate               an average
    pot        (per year)    (per year)     % diff      retirement
                                                       GBP6,279 men
    Gender
    neutral     GBP3,021      GBP2,722       11%       GBP7,176 women

Enhanced annuities  

                             Bottom
    GBP50,000  Top quartile  quartile              Difference over
    pension    average rate  average rate          an average
    pot        (per year)    (per year)     % diff retirement
                                                   GBP5,166 men
    Gender
    neutral      GBP3,538      GBP3,292       7%   GBP5,904 women

Source: Moneyfacts / MGM Advantage Annuity Index June 2014 

Notes to editors:  

  1. Source: MGM Advantage analysis of Index rates, comparing the average top quartile enhanced rate and bottom quartile standard rate using a £50,000 pension pot.
  2. Annuity rates are based on analysis of data supplied by Investment Life and Pensions Moneyfacts to MGM Advantage (30 June 2014). The analysis looked at level annuities without a guarantee and income levels are based on a pension pot of £50,000 and a retirement age of 65. All rates are on a gender neutral basis. To create total retirement income figures the Index multiplied annual annuity income by 21 years in the case of men and 24 years in the case of women (at age 65). Enhanced rate figures are from a sample of smoker rates and enhanced rates based on health conditions. The Index bases its life expectancy figures on Office of National Statistics figures, using the cohort tables at age 65.
  3. Source: MGM Advantage analysis of annuity rates from Investment Life and Pensions Moneyfacts. The average annuity is calculated from average standard and average enhanced rates.

About MGM Advantage 

http://www.mgmadvantage.com 

Follow MGM Advantage on Twitter: twitter.com/MGMAdvantage or find us on Facebook: facebook.com/MGMAdvantage and Linkedin.

MGM Advantage is a retirement income specialist, innovating, growing rapidly and working hard to make the most of people's money in retirement. From offices in London and Sussex, the provider sells its products through financial advisers.

The company attracted the backing of private equity investors TDR Capital, with the deal concluding in late 2013. This resulted in the creation of a new life company using the MGM Advantage brand, and resulted in a split from the mutual society (Marine and General Mutual).

The strategy set out in 2008, to focus on the retirement income market, is retained.

MGM Advantage's market leading products include an investment-linked annuity, the Flexible Income Annuity, the first retirement income product to be rated five stars by Moneyfacts. This gives customers the flexibility to change income levels at different stages of retirement and the potential for growth and therefore, the potential to negate the impact of inflation. It also provides a minimum income guarantee and death benefits.  Enhanced rates are also available for the Flexible Income Annuity.

MGM Advantage also specialises in providing enhanced annuities designed to provide additional income in retirement for people with health conditions, a poor medical history, or lifestyle conditions, for example smoking.

Through new product innovation and development MGM Advantage is always looking to find ways in which its customers can improve their retirement income, and encourages people approaching retirement to shop around for the best annuity.

MGM Advantage is part of a group of companies owned by ICE Acquisitions SARL (ICE Group). This group of companies includes the new life company (MGM Advantage) and a service company (MGM Advantage Services Limited). MGM Advantage manages assets in excess of £1.4bn (as at December 2013).

For further information
MGM Advantage
Paul Keeble    
+44(0)7833-085387
paul.keeble@mgmadvantage.com

Modal title

Contact PR Newswire

  • +44 (0)20 7454 5110
    from 8 AM - 5:30 PM GMT
  • General Enquiries
  • Media Enquiries
  • Partnerships

Products

  • Content Distribution
  • Multimedia Services
  • Disclosure Services
  • Cision Communications Cloud®

About

  • About PR Newswire
  • About Cision
  • Partnering Opportunities
  • Careers
  • APAC
  • APAC - Simplified Chinese
  • APAC - Traditional Chinese
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Israel
  • Japan
  • Korea
  • Mexico
  • Middle East
  • Middle East - Arabic
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United States
  • Vietnam

My Services

  • All News Releases
  • Customer Portal
  • Resources
  • Blog
  • Journalists
  • Data Privacy

Do not sell or share my personal information:

  • Submit via Privacy@cision.com 
  • Call Privacy toll-free: 877-297-8921

Contact PR Newswire

Products

About

My Services
  • All News Releases
  • Customer Portal
  • Resources
  • Blog
  • Journalists
+44 (0)20 7454 5110
from 8 AM - 5:30 PM GMT
  • Terms of Use
  • Privacy Policy
  • Information Security Policy
  • Site Map
  • RSS
  • Cookie Settings
Copyright © 2025 PR Newswire Europe Limited. All Rights Reserved. A Cision company.