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6 February 2023 last updated

Gilt yields down by 32 basis points with investor concerns of global growth

Gilt yields reduce by 32 basis points
Standard rates:  
annuity rates change 5.41%
Enhanced rates:  
annuity rates change 4.63%
Gilt yields:  
annuity rates change 32 basis point
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15-year gilt yields chart - Based on figures for January 2023
Latest gilt yield chart

Annuity Rates UK - January 2023 review

The 15-year gilt yields reduce by 32 basis points falling to 3.70% as investors are concerned with recession and impact on global economic growth.

The slowdown in the global economy suggests central banks are likely to be more dovish about raising base rates. As a result providers have reduced standard annuity rates by an average of -5.41%.

This has reversed the rise in annuity rates during December 2022 even though central banks intend to raise base rates several times in the next few months.

Find related news here:
Annuity rates up 42pc last year and record levels of retirement income
Enhanced annuity rates up 5pc as gilt yields rise 50 basis points

Providers of standard annuities reduced annuity rates by an average of -5.41% for this month and we would expect rates to rise by +2.21% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers have reduced their rates by an average of -4.63% and we would expect rates to rise by +1.43% 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   7%
annuity rates no change   0%
annuity rates decrease   93%
Increases of:
max 1.7%


Decreases of:
max -9.4%

  Fig 1: Annuity rate changes for the whole market

For the month 7% of annuity rates increased by up to 1.7% with 0% remaining unchanged and 93% decreasing by as much as to -9.4%.

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 4.02% to 3.70% or -32 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 - January 2023
Day Rate (%) Change (bp*)
3 4.01 -1
4 3.88 -13
5 3.95 +7
6 3.90 -5
9 3.95 +5
10 3.93 -2
11 3.78 -15
12 3.70 -8
13 3.74 +4
16 3.75 +1
17 3.70 -5
18 3.68 -2
19 3.67 -1
20 3.73 +6
23 3.69 -4
24 3.62 -7
25 3.59 -3
26 3.66 +7
27 3.68 +2
30 3.69 +1
31 3.70 +1
  Table 1: Daily 15-year gilt yields and changes
* bp - basis points
News related stories:
Annuity rates still at thirteen year high even with lower gilt yields
Gilt yields reach fourteen year high of 5.09pc with record annuity 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
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