Challenger offers new annuity rate

Challenger annuity rate

Challenger has released a new guaranteed fixed term annuity rate reflecting a 3 per cent increase for retirees over the past 12 months.

Challenger has released a new guaranteed fixed term annuity rate of 4.4 per cent a year for a limited time for investors who choose a three-year term annuity.

The rate will be available for investors purchasing the annuity before 11 September and may vary after that time, but Challenger stated the new increased rate, which will apply for the three-year term, “shifts annuities into sharper competition with other defensive assets such as term deposits”.

The increased rate is around 3 per cent higher than this time year last year and the firm added customers who invest in the three-year term annuity and choose to receive all their capital back at the end of the term will receive guaranteed annual payments over the period.

It added the benefits of purchasing an annuity at this time were the certainty income would not be impacted by the performance of the share market; regular, guaranteed annual payments and a return of the investment at the end of the three-year term; and control over estate planning by nominating beneficiaries.

Challenger chief customer officer Stuart Kingham said: “The three-year fixed term annuity rate of 4.4 per cent is potentially better than many other low-risk offerings and comes with the Challenger guarantee.

“It reflects Challenger’s ability to offer competitive rate annuities in an environment where the Reserve Bank of Australia is raising the official cash rate.

“For many retirees and savers, this offer could be attractive, particularly when compared to other defensive assets.”

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