Annuity Rates, Annuities, Pensions, Divorce Annuity Rates Charts
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources
   


2 July 2022 last updated

Gilt yields fall 33 basis points off peak due to investor recession fears

Gilt yields fall 33 basis points
 
Standard rates:  
annuity rates change 7.05%
Enhanced rates:  
annuity rates change 8.79%
Gilt yields:  
annuity rates change 19 basis point
 
  More annuity topics
  Second half 2022 news
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2024
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 
 
15-year gilt yields chart - Based on figures for June 2022
Latest gilt yield chart

Annuity Rates UK - June 2022 review

Gilt yields reduced by -33 basis points off the 2.92% eight year peak reached in June as investors fear a global recession, even though annuity rates increased by the largest amount on record for a single month.

After climbing strongly during June, the 15-year gilt yields dropped -33 basis points to 2.59% due to investor fear of recession following -18% to -34% falls in energy, metals and agriculture prices.

Global recession would mean lower consumer demand reducing inflation which could impact how quickly central banks raise base rates. As a result investors returned to safe havens such as Treasury notes, gilts and bunds.

Providers increased standard annuity rates rates by 23.93% for the the six months of 2022 and 23.84% for enhanced annuities. This compares to gilt yields rising 145 basis points when we would expect annuities to increase by only 14.5% over this period.

The correction of gilt yields from the peak in June due to recession fears increases the risk that annuities could fall if yields remain at current levels.

Find related news here:
Ban on Russian oil sends gilt yields to 2.4pc and higher annuity rates
Pension annuities up 23pc as base rates to rise due to higher oil prices

Providers of standard annuities increased annuity rates by an average of 7.05% for this month and we would expect rates to fall by -4.35% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers have increased their rates by an average of 8.79% and we would expect rates to fall by -6.09% 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   100%
annuity rates no change   0%
annuity rates decrease   0%
Increases of:
max 14.0%

 

Decreases of:
max -0.0%

  Fig 1: Annuity rate changes for the whole market


For the month 100% of annuity rates increased by up to 14.0% with 0% remaining unchanged and 0% decreasing by as much as to -0.0%.

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


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 the latest updates see Annuity Rates Review.

Changes to the 15-year gilt yields

The yields change for the month from 2.40% to 2.59% or 19 basis points. Table 1 below shows the daily 15-year gilt yields and the increase or decrease from the previous day's close:


15-Year Gilt Yields - June 2022
Day Rate (%) Change (bp*)
1 2.42 +2
2 2.41 -1
3 2.41 0
6 2.50 +9
7 2.45 -5
8 2.48 +3
9 2.53 +5
10 2.61 +8
13 2.71 +10
14 2.80 +9
15 2.69 -11
16 2.72 +3
17 2.72 0
20 2.84 +12
21 2.90 +6
22 2.76 -14
23 2.60 -16
24 2.58 -2
27 2.68 +10
28 2.76 +8
29 2.69 -7
30 2.59 -10
  Table 1: Daily 15-year gilt yields and changes
* bp - basis points
News related stories:
Annuity rates soar 19pc to highest level in six years as gilt yields rise
Gilt yields rise 20 basis points as Federal Reserve to raise rates
Annuity Rates
  Age Single Joint  
  55 £5,736 £5,481  
  60 £6,132 £5,880  
  65 £6,860 £6,462  
  70 £7,678 £7,215  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
  Annuity Rates  
Annuity Quotes
  Plan your annuity and get quotes from the 12 leading providers  
 
  free annuity quote Free Annuity Quotes
  annuity quote no obligation No Obligation
  annuity quote all providers From All Providers
 
  Annuity Quote  
  Annuity Rates News:

Annuities down 4pc with falling gilt yields
Annuity rates down -4pc Annuities are lower by -4.42% as gilt yields reduce -65 basis points at 3.95%
Annuity rates at risk with inflation at 3.9%
Annuity rates at risk Annuity rates are at risk with lower gilt yields and inflation falling to 3.9%
Gilt yields reduce by 53 basis points
Gilt yields reduce 53 basis points Gilt yields reduce to 4.60% after reaching a peak of 5.13% in October 2023
Annuities peak with lower gilt yields
Annuities reach the peak Annuities may have peaked as the Bank of England leaves interest rates unchanged
Pension annuities reduce by 3pc
Pension annuities reduce by 3% Pension annuities fall by -3% as gilt yields reach a fifteen year record high

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page
Sharingpensions.co.uk   This website is for marketing purposes only and does not provide financial or legal advice, see about our services. Website security is by GeoTrust and Equifax. Copyright©2001-24 Sharingpensions.co.uk. All Rights Reserved