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2 April 2018 last updated
Gilt yields fall after Donald Trump unveils trade tariffs on China
15-year gilt yields chart
Based on figures for March 2018
Latest gilt yield chart

Gilt yields fall as investors fear economic uncertainty as President Donald Trump unveiled $50 billion of trade tariffs on Chinese imports and possible reciprocal measures being imposed.

Standard rates:  
annuity rates change 0.16%
Enhanced rates:  
annuity rates change 0.02%
Gilt yields:  
annuity rates change 17 basis point

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Investors seek safe havens with tariff threats

The 15-year gilt yield decreased by -17 basis points to 1.58% during March 2018 with providers of standard annuities decreasing rates by an average -0.16% for this month and we would expect rates to fall by -0.98% in the short term if yields do not fall.

For smoker and enhanced annuity providers have increased their rates by an average of 0.02% and rates may fall by -1.72% in the short term if yields do not fall.

Fig 1 below shows the annuity rates changes for the whole market and the proportion that have either increased, decreased or or did not change. It also shows the range of the changes of the annuity rates over the last month:

Annuity Rates Changes
Increase No change Decrease
annuity rates decrease   38%
annuity rates no change   14%
annuity rates decrease   48%
Increases of:
up to 1.3%


Decreases of:
up to -1.8%

  Fig 1: Annuity rate changes for the whole market

For the month of 38% of annuity rates increased by up to 1.3% with 14% remaining unchanged and 48% decreasing by up to -1.8%.

What happened to standard rates

Below shows a fund of £100,000 with the change in standard annuity rates for single and joint pensioners from age 55 to 75 with different annuity options such as level or escalating over 1 month compared to gilt yields:

Standard annuity 1 month changes
Fig 2: Change in standard rates last month compared to gilt yields

Standard annuities decreased by an average of -0.16% during the month. The largest rise was for those aged 60 based on a 100% joint life rates up by 1.03% for the month with the largest decrease for those aged 55 on a single life basis down -1.86%.

What happened to enhanced rates

Lifestyle smoker and enhanced annuities have decreased significantly across the board for all types of annuities and ages.

Enhanced annuity 1 month changes
Fig 3: Change in enhanced rates last month compared to gilt yields

For enhanced and smoker the majority of rates increased by only 0.02% for the month on average. The largest rise was for those aged 70 based on a 100% and 50% joint life rates up by 1.30% for the month with the largest decrease for those aged 55 on a 50% joint life and 3% escalating basis down -1.32%.

For the latest updates see Annuity Rates Review.

Changes to the 15-year gilt yields

The yields change for the month from 1.75% to 1.58% or -17 basis point. Fig 2 below shows the daily 15-year gilt yields and the increase or decrease from the previous day's close:

15-Year Gilt Yields - March 2018
Day Rate (%) Change (bp*)
1 1.73 -2
2 1.73 0
5 1.76 +3
6 1.77 +1
7 1.75 -2
8 1.73 -2
9 1.76 +3
12 1.76 0
13 1.74 -2
14 1.68 -6
15 1.67 -1
16 1.66 -2
19 1.66 0
20 1.69 +3
21 1.72 +3
22 1.65 -7
23 1.66 +1
26 1.65 -1
27 1.64 -1
28 1.60 -4
29 1.58 -2
  Table 1: Daily 15-year gilt yields and changes
* bp - basis points

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Annuity Rates
  Age Single Joint  
  55 £3,851 £3,569  
  60 £4,268 £3,973  
  65 £4,965 £4,581  
  70 £5,831 £5,274  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
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