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8 April 2022 last updated

Gilt yields rise 20 basis points as Federal Reserve to raise rates

Gilt yields rise 20 basis points
Standard rates:  
annuity rates change 2.26%
Enhanced rates:  
annuity rates change 2.18%
Gilt yields:  
annuity rates change 20 basis point
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15-year gilt yields chart - Based on figures for March 2022
Latest gilt yield chart

Annuity Rates UK - March 2022 review

The 15-year gilt yields increased 20 basis points to 1.82% as the Federal Reserve Chairman Jerome Powell has indicated rates will rise more aggressively by 0.5% increments to control inflation.

Providers have increased annuity rates for the second month in a row as the recovery continues to benefit people at retirement.

Find related news here:
Annuities at 3 year high as yields bounce back ahead of rising rates
Pension annuities rise 9pc ahead of higher base rates in 2022

Providers of standard annuities increased annuity rates by an average of 2.26% for this month and we would expect rates to fall by -0.26% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers have increased their rates by an average of 2.18% and we would expect rates to fall by -0.18% 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 6.2%


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 6.2% 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 1.62% to 1.82% or 20 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 - March 2022
Day Rate (%) Change (bp*)
1 1.33 -29
2 1.46 +13
3 1.51 +5
4 1.43 -8
7 1.50 +7
8 1.63 +13
9 1.70 +7
10 1.71 +1
11 1.67 -4
14 1.78 +11
15 1.77 -1
16 1.82 +5
17 1.79 -3
18 1.74 -5
21 1.87 +13
22 1.92 +5
23 1.85 -7
24 1.86 +1
25 1.89 +3
28 1.81 -8
29 1.84 +3
30 1.86 +2
31 1.82 -4
  Table 1: Daily 15-year gilt yields and changes
* bp - basis points

News related stories:
Annuity rates higher as gilt yields reach recent highs on inflation fears
Gilt yields higher as central banks may raise rates faster than expected
Pension annuities could fall over 1pc with new Covid variant Omicron
Annuity Rates
  Age Single Joint  
  55 £4,574 £4,142  
  60 £4,961 £4,610  
  65 £5,691 £5,238  
  70 £6,478 £6,098  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
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