Many people assumed that the attractions of being able to draw income from pension plans would eclipse the annuity market, but recent stock market volatility provided a reminder of the benefits of a guaranteed stable lifetime income.
Furthermore, the Autumn Statement contained an important additional benefit to annuities, in that payments made from joint life annuities to surviving spouses, children and others will as from 6 April 2015 be free of tax if the deceased annuitant dies before age 75.
This addresses the concern that some married retirees take out annuities on their own lives for the higher income and neglect to provide for their spouses. There will now be a major incentive to favour joint life over single life annuities.
