Annuity rates recover to two-year high in Q3

Pension payout rates have soared to a two-year high – bringing a welcome boost to millions of workers planning for retirement.

Figures yesterday revealed that people buying an annuity now will get 11 per cent more than this time last year.

Pensions have been squeezed by falling investments, a record low base rate of 0.5 per cent and the Bank of England’s money printing ­programme, which has pushed down the price of Government bonds and damaged annuity rates.

In November 1991 average rates were over 14 per cent. Today they are around 5.8 per cent.

The MGM Advantage Annuity Index showed rates increasing by six per cent in the third-quarter of the year, the largest quarterly increase since August 2009.

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