Male single life level annuity rates and inflation-linked annuities fell in February, while smokers rates remained largely stable, Alexander Forbes Annuity Bureau said today.

Single life level annuity rates, based on a 60-year-old man with a £100,000 pension pot, were cut by several providers, with table topper Aviva reducing its rate by £160 to £5,430 a year. Legal and General fell from second to fourth place when it decreased its rate by £171.92 to £5,248.08, while Canada Life and Hodge Life kept their rates static.

Inflation-linked annuity rates also fell, with Aviva falling to second place after reducing its rates by £230 to £2,920, while Standard Life took over first place despite dropping its rates by £72 to £3,022. Canada Life was the only provider to maintain its rates, at £2,864.52.

In February, smokers rates were maintained by Reliance Mutual, Canada Life and L&G. However, LV= cut its rates by £103.63 to £6.478, while Aviva increased rates by £150 to £6,060.

Head of Alexander Forbes Annuity Bureau Gemma Goodman said: “In contrast to the stability of January’s rates, February has seen a mixed bag of changes across the board with a number of movements on the table. For a 60 year old male smoker buying a level life annuity with a £100,000 pot of money, Aviva has increased its rates by £150 since January, while LV= has decreased its rate by £103.63.

“Providers are adjusting their books with one eye on inflation, with the Bank of England’s quarterly inflation report due on 15 February, and another on gilt yields, which could continue to fall if the Greek bail talks fail, or bounce if the equity rally continues. This makes it hard to call the next short term move on annuity rates, especially with other factors such as the gender discrimination rules coming into effect late this year will also begin to impact rates throughout 2012. Long term though the trend remains downwards.”

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