Gilt yields fall to 4.81pc the lowest point in the last year reducing annuities

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

Annuity Rates UK - October 2025 review

The 15-year gilt yields fall -32 basis points in October 2025 to 4.81%, the lowest point in the last year as investors seek the safe havens of bonds and gilts.

Providers react by reducing standard annuity rates by -1.81% and enhanced annuities by -2.68% with our benchmark for a 65 year old using £100,000 purchasing a single life, level income reducing £147 pa to £7,672 pa. 

Geopolitical factors have influenced bonds and gilts with an increase in US-China trade tensions, poor US economic data and expectation of lower US interest rates which were reduced by the US Federal Reserve by -0.25% in October 2025 to a range of 3.75% to 4.00%.

In the UK the consumer price index (CPI) remained at 3.8% suggesting inflation may have peaked and the Bank of England could reduced interest rates before the end of the year.

Find related news here:
Gilt yields remain high as investors expect fewer interest rate cuts
Annuities rise as yields exceed 5pc due to UK public finance concerns

Providers of standard annuities decreased rates by an average of -1.81% this month and we would expect rates to fall by -1.39% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers decreased their rates by an average of -2.68% and we would expect rates to fall by -0.52% in the short term if yields remain at current levels.

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   6%   0%   94% Increases of: max 1.7%   Decreases of: max 4.0 %

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