Yields lower by 34 basis points with fear of contagion from bank bailout

15-year gilt yields chart - Based on figures for March 2023

Annuity Rates UK - March 2023 review

Providers reduce annuity rates by 3.2% after the bank crisis sees the bailout of American SVB bank and European Credit Swiss bank.

Fear of contagion with other banks resulted in 15-year gilt yields reducing by 34 basis points from 4.13% and ending March at 3.79% as investors moved to safe havens.

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Providers of standard annuities reduced annuity rates by an average of -3.21% for this month and we would expect rates to rise by +0.68% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers have reduced their rates by an average of -3.10% and we would expect rates to rise by +0.69% 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   0%   0%   100% Increases of: max 0.0%   Decreases of: max -7.5%

Fig 1: Annuity rate changes for the whole market

Fig 2: Change in standard rates last month compared to gilt yields

Fig 3: Change in enhanced rates last month compared to gilt yields