Annuities fall 0.75pc despite rising gilt yields as investors sell safe havens

15-year gilt yields chart - Based on figures for May 2025

Annuity Rates UK - May 2025 review

Annuities fall -0.75% on average despite 15-year gilt yields rising 34 basis points to 5.23% after investors sell bond and gilt safe havens due to the Trump trade deal and roll back of tariffs.

President Donald Trump agreed a trade deal with the UK on 8 May reducing the tariffs on UK cars exported to the US from 27.5% to 10% for the first 100,000 units. The deal also removes tariffs on steel and aluminum exported to the US.

On 12 May the US and China agreed a 90-day suspension to tariffs with the US tariffs on China failing from 145% to 30% and China reduced tariffs on the US from 125% to 10%, sending bond and gilt yields significantly higher during the month before falling back.

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Providers of standard annuities reduced rates by an average of -0.61% this month and we would expect rates to rise by +2.11% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers reduced their rates by an average of -0.88% and we would expect rates to rise by +2.38% 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   17%   5%   78% Increases of: max 1.0%   Decreases of: max 2.2 %

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