Pocket money... annuity rates are ticking up

⬤ Annuity rates are increasing at the “fastest pace in more than 30 years”, says Jessica Beard in The Daily Telegraph. For over a decade annuities have been a tough sell, because low rates have meant people would have to hand over large amounts of their pension fund to secure a small, guaranteed income.

But now these policies have “staged a comeback, as payouts jump from all-time lows”, due to increases in the Bank of England’s base rate and the knock-on rise in government bond yields. A new annuity bought with a £100,000 lump sum “now pays out £13,000 more on average over the course of a retirement than one bought last year”.

⬤ “Savers could bag up to £2,000 cashback by moving their pension or Isa,” says Imogen Tew in The Sunday Times. Interactive Investor is offering switching bonuses on both individual savings accounts (Isa) and self-invested personal pensions (Sipps).

If your Isa is worth £10,000 – and you aren’t an existing Interactive Investor customer – you can get £100 cashback if you transfer to them before the end of June. Both new and existing customers can also get cashback if they move a Sipp to the platform. If your pension is worth £10,000 to £25,000 you would get £100, rising to £2,000 if your pot is worth over £2m.

However, you should check the fees are cheaper than what you currently pay, “as this will affect your investments more than some one-off cashback”. And make sure you won’t lose any valuable benefits if you transfer your pension.

⬤ “The bank branch that doesn’t look like a bank is upon us,” says George Nixon in The Times. Banks are continuing to close traditional branches, but new types of branches are appearing across the country.

Barclays has opened 130 “pop-up banks” in venues such as cafes and village halls. Halifax is trying branches that resemble coffee shops, with “a sandwich board outside, offering £2.65 lattes and £2 espressos”. And Santander is preparing more “work cafes” like the one it opened in Leeds in 2019. This is open later than many normal branches, and has meeting rooms, free Wi-Fi and coffee discounts for Santander customers.