Annuity Rates, Annuities, Pensions, Divorce Annuity Rates Charts
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources
   


5 June 2020 last updated

Annuities could rise as equity markets and gilt yields rebound
Equity markets and gilt yields rebound
  Annuity rates could rise 1.9% with higher gilt yields as US markets lead equities higher
 
  More annuity topics
  First half 2020 news
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Strong rise in US equities with better than expected economic data and less impact from Covid-19 sends global markets and gilt yields higher.

The US Dow Jones Index is up 6.4% for the first week of June with the FTSE-100 Index increasing 318 points or 5.1% to 6,484. Since reaching a low of 4,993 on 23 March the index has increased 1,491 points or 29.8%.

Yields on bonds and gilts have increased with the 15-year gilt yields rising 19 basis points to 0.58%. As annuity rates are mainly based on these yields it suggests that providers may be able to increase pension annuities by about 1.9% at some point in the future if gilt yields remain at this level.

In the US the level of unemployment has reduced from 14.7% to 13.3% when analysts expected the level of unemployment to increase to 19%. In addition there is substantial fiscal and monetary stimulus available to support the economy when needed.


Gilt yields and annuity rates

  FTSE-100 index and gilt yields
  Dec Jan Feb Mar Apr May June
FTSE 7,542 7,286 6,580 4,993 5,901 6,076 6,484
Rates £5,098 £5,032 £5,027 £4,853 £4,926 £4,920 £4,920

Fig 1: Chart and table comparing FTSE-100 Index and 15-year gilt yields


The above chart and table shows the rapid recovery in the FTSE-100 index after reducing to 4,993 following investor fear of the economic impact of Coronavirus.

Find related news here:
Equity markets rally on hopes for vaccine as yields lack direction
Annuity rates higher despite lower yields with global economic concerns
Equity markets surge 15% as US Senate agrees $2tn stimulus package


The combination of news from drugs researcher Moderna on 18 May of a positive outcome from the vaccine trial against Covid-19 and better than expected unemployment figures in the US has given investors more confidence that the economic outlook may not be as bleak as expected.

Rising equity markets is against a backdrop of demonstrations and protects around the would after the death of George Floyd and continuing spread of Covid-19 in South America and Middle Asia.

During the Coronavirus pandemic annuity rates have remained surprisingly steady with our benchmark example of a 65 year old with £100,000 buying an annuity on a single life, level basis reducing from £5,032 pa in January to £4,853 pa in March.

The rate of £4,920 pa in June is actually 1.93% higher than the figure in October 2019 and for those invested in equities, your fund is likely to have recovered much of the losses sustained since March.

News related stories:
Retirement income at decade low with panic selling on equity markets
Investors seek safety of gilts as global health emergency declared
Annuity rates lower as demand for safe havens rise on coronavirus fears
Annuity Rates
  Age Single Joint  
  55 £6,361 £5,898  
  60 £6,842 £6,244  
  65 £7,474 £6,843  
  70 £8,405 £7,660  
£100,000 purchase, level rates, standard
Unisex rates and joint life basis
  Annuity Rates  
Annuity Quotes
  Plan your annuity and get quotes from the 12 leading providers  
 
  free annuity quote Free Annuity Quotes
  annuity quote no obligation No Obligation
  annuity quote all providers From All Providers
 
  Annuity Quote  
  Annuity Rates News:

Annuities rise 6% to eleven year high
Annuities rise 6% to 11 year high Annuities rise 6% and gilt yields increase 90 basis points due to central bank action
Gitl yields rise 87 basis points
rise 87 basis points Gilt yields higher as investors shrug off global recession fears as base rates rise
Retirement income at record high
Retirement income soars Retirement income rises by 71.6% as yields and annuities are driven higher
Pension annuities fall on recession fears
Pension annuities fall Pension annuities fall and gilt yields are lower by -27 basis points to 2.32%
Annuity rates rise but yields weaken
Annuity rates rise 7pc last month Annuity rates rise by a record 7% for a single month but gilt yields weaken

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page
Sharingpensions.co.uk   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-22 Sharingpensions.co.uk. All Rights Reserved