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

5 March 2014 last updated
Impaired annuity rates rise as standard rates reduced by providers
15-year gilt yields chart
Based on figures for February 2014
15-year gilt yields February 2014

Impaired annuity rates have been increased by up to 2.5% as competition increases while standard annuities slip lower after a the 15-year gilt yields end about where they started the month.

Standard rates:  
annuity rates down 0.31%
Enhanced rates:  
annuity rates up 0.83%
Gilt yields:  
annuity rates up 1 basis point

  More annuity topics
  Quarter 1 News 2014
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Mixed annuities rates react to market volatility

The 15-year gilt yields have increased by 1 basis point after a stable month with a narrow range. As a general rule a 1 basis point rise would result in a 0.1% rise in annuity rates.

The Federal Reserve pledged to continue with the stimulus package giving markets confidence that there would not be a sudden change in policy.

Equity markets started at 6,510 and increased 300 points to end at 6,810. This represents a 4.60% rise and for people that remain invested have seen their fund increase in value to counter the fall in standard annuity rates.

Standard providers decreased their rates by 0.31% and we would expect so see an increase of about 0.41% in the short term but in the medium term of 3 months they can increase by 1.54%.

Smoker and enhanced annuity providers increased their rates by 0.83% on average and a decrease of 0.73% is possible in the short term but in the medium term of 3 months the decrease is less at 2.33%.

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 increase   62%
annuity rates no change   11%
annuity rates decrease   27%
Increases of:
0.3% - 1.6%

  Decreases of:
  Fig 1: Annuity rate changes for the whole market

All of the enhanced and smoker annuities increase last month and in particular impaired annuities were higher by up to 2.5%.

For standard rates a small number showed modest increases with the majority decreasing or not changing. The largest decreases were for escalating rates for single life annuitants down by as much as 2.70% for those aged between 60 and 75.

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 showed small changes relative to gilt yields except for single life, 3% escalating rates which decreased significantly.

What happened to enhanced rates

Lifestyle smoker and enhanced annuities have decreased in line with the fall in gilt yields and in particular for joint life rates.

Enhanced annuity 1 month changes
Fig 3: Change in enhanced rates last month compared to gilt yields

For enhanced and smoker annuity rates all the rates increased more than the gilt yields suggesting more active competition in the market from providers.

Impaired providers have increase their rates and are being more aggressive with winning business. See Annuity Rates Review For the latest updates.

Changes to the 15-year gilt yields

The US Federal Reserve has reassured investors that there will not be any sudden change in the stimulus policy and that there will be a steady decline over time.

The stimulus has reduced to $75 billion with a further $10 billion this month to $65 billion and will continue future reductions based on the improvement in the US economy.

For February the yields range for the month was from 3.13% to 3.26% or 13 basis points which is one of the lowest ranges compared to previous months. 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 - February 2014
Mon 3rd Tues 4th Wed 5th Thurs 6th Fri 7th
gilt yields down   0.02
gilt yields up   0.01
gilt yields down   0.01
gilt yields up   0.05
gilt yields down   0.02
Mon 10th Tues 11th Wed 12th Thurs 13th Fri 14th
gilt yields up   0.01
gilt yields up   0.01
gilt yields up   0.07
gilt yields down   0.04
gilt yields no change
Mon 17th Tues 18th Wed 19th Thurs 20th Fri 21st
gilt yields down   0.01
gilt yields down   0.01
gilt yields down   0.02
gilt yields up   0.06
gilt yields down   0.02
Mon 24th Tues 25th Wed 26th Thurs 27th Fri 28th
gilt yields down   0.01
gilt yields down   0.02
gilt yields down   0.02
gilt yields down   0.04
gilt yields up   0.04
  Fig 2: Daily 15-year gilt yields and changes

News related stories:
Enhanced annuity rates 2.5% higher as providers now more competitive
UK annuity income is 2.4% lower as FTSE-100 index falls
Annuity rates 2% lower from Legal & General surprises market
Best annuities threat as gilt yields fall after poor US jobs data

Annuity Rates
  Age Single Joint  
  55 £4,574 £4,142  
  60 £4,961 £4,610  
  65 £5,691 £5,238  
  70 £6,478 £6,098  
£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:

Annuity rates rise due to inflation fears
Gilt yields rise over 2pc 15-year gilt yields are up 28 basis points as investors expect rise in base rates
Annuity rates soar 19pc to high for 6 years
Annuity rates soar19% Annuity rates reach a six year high up 19% since January 2021 as gilt yields rise
Gilt yields rise 20 basis points
Gilt yields rise 20 basis points Federal Reserve to raise rates more aggressively with gilt yields up to 1.82%
Annuities are at a 3 year high
Pension annuities could fall with Omicron variant Higher gilt yields sends annuities to a three year high up 11.1% in the last year
Pension annuities rise 9pc over a year
Pension annuities rise 9pc Pension annuities rise almost 9pc as yields increase ahead of higher base rates

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page   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 All Rights Reserved