Four of the top five annuity providers in the UK increased their rates by 2% in September, according to the Annuity Bureau
Annuity rates, reviewed by the bureau, last month, saw Legal & General, Canada Life, Prudential and Standard Life all increased the income they offer. Aviva's rates remained unchanged for second month running.
According to The Annuity Bureau Legal & General remained the most generous provider, offering an annual income of £5,616.72 for a single life and £5,207.64 on a joint life basis for a payment of £100,000. Canada Life was the second best provider, paying £5,443.20 on a single life and £5,145.12 on a joint life basis. Aviva remained in third place, paying more than £600 per year less than Legal & General on a single life basis and nearly £400 less on a joint life basis.
Annuity Bureau director Richard Williams said: 'Whilst standard annuity rates have largely risen again in September, the market still does not seem to have accounted fully for the recent increase in gilt yields, with rates only being back to the level they were at in June 2012 when gilt yields were 90 basis points lower.'
'Movements in rates occur on a weekly basis and it is therefore always worthwhile obtaining an up-to-date illustration to make sure that the best possible income is being obtained.'
The Annuity Bureau also found that the inflation-linked annuities remained 'fairly stable' over the month. It said Legal & General was the only provider to make a 'significant' increase of nearly 2% in their rates for Retail Price Index-linked products. However, it remained in second place behind Standard Life which stayed in the top spot, offering an income of £3,070.80 on a single life basis and £2,698.80 on a joint life basis.
Canada Life and Aviva were in third and fourth place, but lagged far behind the top two in the amount of income they would provide, with Aviva's rates again remaining unchanged throughout the month, said the bureau.
On smoker rates, Reliance Mutual was the 'big mover' in September. Its rates rose by between 3% and 4% to first place in the joint life tables, replacing LV= which cut its rates by just over 1% and slipped into third place.
Reliance Mutual is now paying £5,823.12 per year for a male smoker aged 60 and female smoker aged 57, compared to Just Retirement which cut its joint life rates by 0.4%, but maintained second place with an income of £5,751.00.
For single smokers LV= remained in first place despite cutting its rates by 1.4%, which means that it now gives an income of £6,397.00, down £90 on last month. Just Retirement and Reliance Mutual remained in second and third place, but only £10 and £41.32 respectively behind LV=. Scottish Widows replaced Partnership in fourth place, with an income of £6,192.84.