Lifetime annuity rates have continued to improve in 2024, rising to 7.08 per cent in June for a healthy 65 year old, according to the Standard Life Annuity Rate Tracker.

This is around a 4 per cent increase from the average rate of 6.81 per cent in January and a 2.64 per cent improvement from 6.9 per cent in March.

This would add an extra £3,659 to the average total lifetime income for a 65 year old man and £4,059 to the income of a woman the same age compared to the March rates.

Standard Life noted that annuity rates have continued to marginally improve since the beginning of 2024.

The average rate for a healthy 60 year old rose from 6.16 per cent in January to 6.38 per cent in June, while the average rate for a healthy 70 year old increased from 7.64 per cent to 7.91 per cent over the same period.

These increases mean that annual income has improved by £127 per year for a healthy 60 year old, £182 a year for a healthy 65 year old and £123 annually for a healthy 70 year old.

According to the tracker, a healthy 65 year old man who bought an annuity in June 2024 at a rate of 7.08 per cent could expect a total lifetime income of £142,374, while for a woman the same age it would be £157,958.

For 70 year olds at a rate of 7.91 per cent, men and women would receive £125,835 and £141,664 respectively.

“It’s welcome to see that annuity rates have enjoyed a slow but steady improvement throughout the first six months of the year,” commented Standard Life head of annuities, Pete Cowell.

“While rate improvements are welcome news, the main benefit of an annuity is that it delivers income certainty in retirement, something which 92 per cent of people say they want, according to Standard Life’s Retirement Voice study.

“While income certainty is important, people want to feel in control of their finances. For many, a blended approach often proves more beneficial, incorporating annuities as part of a broader solution.

“Rather than simply deciding whether to annuitise, people should consider how much of their retirement savings they could use to buy an annuity, as well as what age best suits them, and keep this under review if circumstances change, especially since annuity rates typically improve as you age.”

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