My Pension Expert's new research reveals 10% fall in the gap between Standard and Enhanced annuity rates - AZTV7/Cable 13, Me-TV 7.2, HSN 7.3, Phoenix-Prescott, AZ

My Pension Expert's new research reveals 10% fall in the gap between Standard and Enhanced annuity rates

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My Pension Expert investigate the closing gap between the top Standard and top Enhanced annuity rates between September 2013 and July 2014.

Doncaster, South Yorkshire (PRWEB UK) 27 August 2014

The difference between the best available Standard annuity rates and the best Enhanced annuity rates has dropped drastically during the last ten months, new research from My Pension Expert has revealed.

My Pension Expert compared the top rates on offer for someone in perfect health versus someone who suffers from high blood pressure and consumes more than the recommended weekly allowance of alcoholic units. This was then applied to the criteria of a 64-year-old, looking to purchase a single-life annuity, with a pension pot of £100,000.

Back in September 2013 someone eligible for the Enhanced rate would be able to receive an extra 26.11% compared to the Standard rate. Compare that to July of this year where instead an additional 16.93% is on offer, an almost 10% decrease, as there has been a steady decline in the difference between the two rates during the past ten months.

There are a number of causes for this decline that revolve around the differing fortunes of the two rates during the ten month time frame. The top Enhanced Annuity rate has fallen by 3.96% whereas in contrast the Standard annuity rate has actually risen by 3.75%.

The root of this disparity stems from how the two rates handled the pension freedoms announced in the Budget last March. Enhanced annuity providers were quick to cut rates following the announcement, however Standard rates have proven to be more resilient and instead remained fairly stable.

The Budgets heralding of the ability to withdraw a pension as a lump sum has subsequently driven the demand for annuities down and rates with them. Individuals that qualify for an Enhanced annuity are especially inclined to take that option, rather than invest in an annuity that they may not live long enough to receive a profitable return from.

That is potentially one of the reasons why Enhanced Annuities have been hit hardest, another being changes to life expectancy assumptions which continue to rise. Through medication and careful lifestyle management, people diagnosed with medical conditions are now living longer than ever. As a result Enhanced annuity providers have adjusted their rates accordingly.

Scott Mullen director at My Pension Expert said:

This tightening of the gap between Standard and Enhanced annuities demonstrates what a volatile place the annuity market is. With numerous factors affecting the outcome, rates can change drastically on a daily basis and what could have been the best option yesterday may no longer be today.

This is why advice when considering your retirement options is essential. Despite this news, the difference between the best and worst rates remains around 35% and a wrong move could end up costing thousands. Thats assuming an annuity is the right option, thanks to the new pension freedoms a whole host of options are now available that may be more suitable dependent on the individual. An advisor can evaluate these options and guarantee the best outcome.

For the original version on PRWeb visit: http://www.prweb.com/releases/2014/08/prweb12115512.htm

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