Annuity Rates, Annuities, Pensions, Divorce Free Fixed Term Quote
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources
 

5 October 2016 last updated
Latest annuities increase as yields rise after investors sell bonds
15-year gilt yields chart
Based on figures for September 2016
Latest gilt yield chart
 

Providers have increased the latest annuities after the 15-year gilt yields rise as high as 1.31% ending 18 basis points up over the month following investor selloff of US bonds.

Standard rates:  
annuity rates up 0.37%
Enhanced rates:  
annuity rates up 0.18%
Gilt yields:  
annuity rates up 18 basis point



 
  More annuity topics
  Quarter 4 News 2016
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2016
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Another record low for annuities

Investors in the US have been selling government bonds in anticipation the Federal Reserve will increase interest rates. In addition the European Central Bank (ECB) also signaled they intend to be less committed to extending the European Union stimulus programme resulting in a selloff in European bonds.

The combination increased 15-year gilt yields to their highest level since the EU Referendum of 1.31% before closing for the month at 1.16% up 18 basis points.

Standard providers increase rates slightly by an average of 0.37% and we would expect in the short term rates may increase further by 1.43%.

For smoker and enhanced annuity providers increased their rates by an average of 0.18% on average and in the short term rates may increase by 1.62%.

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   77%
annuity rates no change   11%
annuity rates decrease   12%
Increases of:
up to 2.5%

  Decreases of:
up to 4.6%
  Fig 1: Annuity rate changes for the whole market


For the month of September 77% of annuity rates increased by up to 2.5% following investor selloff of US government bonds with only 12% decreasing by up to 4.8% and 11% remaining unchanged.

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


Standard annuities increased by an average of 0.37% during the month by up to 1.2%% for those aged 55 to 60 buying single and joint life annuities. The largest decrease was for those aged 55 buying 3% escalating annuities lower by 3.9%.

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 enhanced and smoker providers rates increased by an average of 0.18% with a larger rise of up to 2.5% for those aged 60 buying 50% joint life, level annuities. The largest decrease was for those single life aged 55 buying 3% escalating annuities lower by 4.6%.


For the latest updates see Annuity Rates Review.

Changes to the 15-year gilt yields

The yields change for the month was from 0.98% to 1.16% or 18 basis points. Fig 2 below shows the daily 15-year gilt yields and the increase or decrease from the previous day's close:



15-Year Gilt Yields - September 2016
Day Rate (%) Change (bp*)
1st 1.01 +3
2nd 1.06 +5
5th 1.05 -1
6th 1.03 -2
7th 1.04 +1
8th 1.11 +7
9th 1.23 +12
12th 1.24 +1
13th 1.31 +7
14th 1.27 -4
15th 1.29 +2
16th 1.27 -2
19th 1.27 0
20th 1.20 -7
21st 1.21 +1
22nd 1.10 -11
23rd 1.12 +2
26th 1.07 -5
27th 1.04 -3
28th 1.07 +3
29th 1.11 +4
30th 1.16 +5
  Table 1: Daily 15-year gilt yields and changes
* bp - basis points


News related stories:
Retirement annuity rates could fall as Bank starts more QE
Pension annuities lower by 9% over the year from leading providers
UK annuities could gain if Fed increase interest rates in June
Annuity Rates
  Age Single Joint  
  55 £4,066 £3,782  
  60 £4,544 £4,240  
  65 £5,246 £4,794  
  70 £6,045 £5,433  
£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:

Pension freedoms help raise fund sizes
Pension freedoms help funds soar to £50,000 Pension fund sizes reach 50,000 with a little help from pension freedoms
Pension freedoms tax receipts at 1.5bn
Pension freedoms tax receipts are £1.5bn Pension freedoms have raised more tax for the HMRC than expected
Best annuities rise 10% since August
Best annuities recover over 10% Providers have increased best annuity rates 10% as gilt yields recover
Annuity sales market scrapped
Second hand annuity market scrapped The second hand pension annuity market has been scrapped by government

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook and Google+
  Facebook Page Twitter 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©2001-17 Sharingpensions.co.uk. All Rights Reserved