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


4 October 2012 last updated
Retirement annuities under threat if BoE move for more Quantitative Easing

The Bank of England have opted to leave Quantitative Easing at £375 billion but hinted for the need of more stimulus from last months meeting minutes with could hit retirement annuities.

Interest rates have remained at 0.5% and Quantitative Easing (QE) at £375 billion by the Monetary Policy Committee (MPC). This follows the decision last month where the Bank of England's MPC also did not make any changes.

More QE would mean that gilt yields would decrease as an injection of money by purchasing government bonds and gilts would increase the price thereby reducing yields. As annuity rates are primarily based on the 15-year gilt yields any change would threaten to decrease annuities.

The Bank of England has set a target for inflation of 2% for the Consumer Price Index (CPI). If inflation falls to this level the BoE would have to take measures to prevent it overshooting.

 
Annuities threat from QE
 
  More annuity topics
  October News 2012
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2016
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Bank of England open to more QE if necessary

From the MPC minutes last month all nine members voted to maintain interest rates at 0.5% but some of the members though that additional stimulus would be necessary in due course. It was anticipated that inflation would not fall back to 2% this year although demand remained weak and a good case could be made for more Quantitative Easing. If interest rates do reduce at a rate faster than expected it may be sufficient for the Bank of England to consider a further injection of stimulus.

For pensioners retiring in 2012 it would be worth purchasing their annuity sooner rather than later to avoid lower pension income as another round of QE would result in a fall in annuity rates. Providers are currently in a downward cycle for pricing annuities and are sensitive to any decline in gilt yields so they would be quick to reach with lower rates.

Apart from this the EU Gender Directive is also going to make an impact with lower male and joint annuity rates by possibly up to 4.7%. The new Unisex Rates will be introduced from 21 December 2012 and providers are currently finalising their schedule for introducing these rates.

News related stories:
Annuity rates likely to lower as Bank of England gives QE hint
UK annuities to stabilise with Bank of England stance on QE
UK annuity rates may lower as QE expected after falling inflation
Annuity rates could remain at current levels with no more QE
Pension annuity buyers biggest losers from QE while richest 5% gain
Related internet links:
Unisex annuity rates lower pensioner income
BBC - Economy in deep crisis BoE open to QE
Annuity Rates
  Age Single Joint  
  55 £4,216 £3,974  
  60 £4,702 £4,423  
  65 £5,453 £5,013  
  70 £6,105 £5,482  
£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 set to rise with ECB signal
Pension annuities set to rise The ECB has signaled the end of cheap money sending gilt yields higher
Best annuity rates fall with lower yields
Best annuity rates fall Best annuity rates reduced by 1.91% following political uncertainty
Annuity income now 18% higher
Annuity income increase since all time low Income from annuities is higher by 18% since reaching the all time low last year
Annuities up 7% since Trump election
Pension annuities up as Donald Trump elected Pension annuities are up by 7% after the election Trump is elected President

  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