Pre G-day, many feared that male annuity income would suffer from the new directive. However, annuity income has improved faster for women, for men it has increased significantly as a result of improving bond and gilt yields and competition in the marketplace heating up.
Women have seen average annuity income secured from a £50,000 purchase rise by 12%, while men have seen an 8% increase compared to pre G-day.
In November 2012, a £50,000 purchase would secure a monthly income of £2,725 for women. On average, this increased to £3,053 in September 2013.
For men, the same size purchase has seen an average income rise from £2,823 to £3,053 over the same time period.
The increase in annuity income is even more prevalent when looking at smokers. Pre G-Day, women smokers were receiving £3,041 a month increasing to £3,483 (up 15%) and men from £3,147 to £3,483 (up 11%) for a £50,000 annuity purchase.
Women have seen the more significant increase in both smoker and non-smoker annuities since G-day, but men have also seen an improvement after the initial fears
Dave Miller, head of portal at Avelo, said: “While annuity incomes are by no means sky-high, they have been boosted for men and women post G-day.
“Improving gilt and bond yields combined with a very competitive market has helped make the difference.
“The enhanced annuity market has gone up a gear, and the inclusion of Scottish Widows as a new entrant has been to consumers’ advantage.
“This improvement may also encourage more people to explore the open market option and get the best deal possible.”
However, despite the improving annuity income across the board for men and women, the number of annuity quotes being processed still shows a gender divide post G-Day.
In November 2012, 26% of annuity quotes processed were for women and 74% for men following a surge of male demand ahead of G-day.
While the gap has shrunk, there are still more than two quotes for men for every quote processed for women.
Miller continued: “Despite the positive news on annuity prices, there is still a clear divide on gender when it comes to processed quotes.
“But to an extent, we are still seeing the legacy of a higher proportion of men than women in work decades ago, which is still impacting the annuities market as they retire.
“Prior to the inception of the Gender Directive male rates were also seen to be more attractive than female and there was a visible drive to sell male annuities.
“The initial view was that male income would fall moving into 2013, but that hasn’t been the case and male annuities are still shown as the more popular sale for advisers.”
