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


11 January 2016 last updated

Latest annuity rates could fall as gilt yields reach 12-month low

Latest annuity rates are under threat of falling as the 15-year gilt yields reach their all time low of 1.68% after a volatile market before recovering to end the day at 1.77%.

Annuity rates are primarily based on the 15-year gilt yields and this year yields have reduced by 52 basis points.

As a general rule a fall of this amount would result in annuity rates reducing by 5.2% at some point in the future.

Standard and impaired annuity rates have already reduced significantly at the end of last year by up to 6% following new EU rules introduced called Solvency 2 aimed at improving the capital requirements of providers.

Providers may have a buffer to a certain extent and as long as yields recover may not need to decrease rates as severely as would be expected in the short term.

Standard annuity providers such as Hodge Life and Canada Life have reduced their rates by 2-3% during the month of February.

 
Latest annuity rates could fall
  15-year gilt yields fall as far as 1.68% before recovering but still threaten annuity rates
  More annuity topics
  Quarter 1 News 2016
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Gilt yields reached their all time low

The 15-year gilt yields did reach an all time low of 1.68% briefly before recovering to 1.77% after a volatile days on both the equity and gilts market. The last time this level was reached was January 2015 following global uncertainty as the European Central Bank (ECB) announced the start of their Quantitative Easing with €1.1 trillion.

This time it is the fear of a global economic slowdown starting in China and lower oil prices that have sent the markets lower with the FTSE-100 index closing at 5,537.

Annuity rates threat as yields fall
Fig 1: Chart comparing annuity rates and 15-year gilt yields


The above chart shows how annuity rates remained strong during the summer of 2015 with reasonably buoyant gilt yields compared to this time last year.

Before the new Solvency 2 rules started on 1 January 2016 the providers reduced their rates and since then yields have reduced close to the all time lows. In the medium term standard annuities are expected to reduce about 2.65%, smoker rates by 1.38% and impaired annuity rates by about 0.6%.

Impaired providers have extra margin and have not reduced their rates to the degree of standard annuity providers due to more aggressive reductions in rates at the end of last year.

News related stories:
Annuity income lower as markets fall on global slowdown fears
Impaired annuities lower by up to 6% ahead of Solvency 2 start date
Annuity rates uncertain as US Fed signals interest rate rise more likely
Pension annuity rates up over 5% as providers are more competitive
Annuity Rates
  Age Single Joint  
  55 £3,947 £3,702  
  60 £4,391 £4,052  
  65 £5,098 £4,638  
  70 £6,055 £5,457  
£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:

Gilt yields rise with US-China trade deal
Gilt yields rise with US-China trade deal

15-year gilt yields rise 14 basis points with annuity rates up for the second month

Providers increase annuity rates by 5%
Providers increase annuity rates Standard annuities rise over 5% with gilt yields recovering from all time lows
Cash annuity offer 14% more income
Purchased life annuity better value Purchased life annuities offer 14% more income than pension annuity
Impaired annuities rise with higher yields
Impaired annuities up 1.5% Impaired annuity rates from providers rise 1.5% with prospect of Brexit deal
Gilt yields rise and Trump delays tariff
Yields recover from all time low

Yields recover from a low as Donald Trump considers limited trade deal with China


  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©2001-20 Sharingpensions.co.uk. All Rights Reserved