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


5 March 2019 last updated

UK annuities could rise as investors leave safe havens
UK annuities fall
  Increase in yields as investors leave safe havens could see annuity rates rise 1.8%
 
  More annuity topics
  First half 2019 news
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 


UK annuities decreased in February by about -1% across the board while gilt yields increased 18 basis points as investors leave the safe havens such as gilts and bonds.

Providers base annuity rates primarily on the 15-year gilt yields which increased by 18 basis points to 1.61% and we would expect incomes to rise by about 1.8% over time.

  Annuity rates and gilt yields
  Aug Sep Oct Nov Dec Jan Feb
Rate £5,563 £5,520 £5,558 £5,563 £5,570 £5,571 £5,487
Yield 1.57% 1.71% 1.62% 1.63% 1.50% 1.43% 1.61%


The above table shows that for our benchmark example of a 65 year old with £100,000 an annuity on a single life, level basis would provide an income of £5,487 pa, reducing 1.5% in February.

In contrast gilt yields have increased 1.8% over the same period and a recovery in annuity rates is possible if yields remain at this level or rise further.

Gilt yields and annuity rates
Fig 1: Chart comparing standard annuity rates and 15-year gilt yields


Over the year 15-year gilt yields have increased slightly by 3 basis points whereas annuities are lower by -2.47% suggesting an upward correction of 2.77% may be possible in the long term.

Annuities reached a recent high in the first half of last year and providers have maintained annuity rates at consistent levels until January 2019 and perhaps the uncertainty of how Brexit concludes has resulted in the recent fall in incomes.

Investors have been leaving the safety of gilts and bonds for other investments such as equities as the US and China are closer to a trade deal avoiding the planned rise in tariffs from 10% to 25% on $200 billion of Chinese goods.

Wall Street is less concern of an economic slowdown with positive growth and fall in jobless rate for the US with no immediate signs of recession. Fear over the Chinese economy may have been exaggerated and a US-China trade agreement may boost global activity and equity markets.

The current fall in annuity rates may be specific to Brexit and April could see a recovery if a deal can be agreed for the UK leaving the European Union.

News related stories:
Retirement income recovers as US stocks lead equity rally
Pension annuities flat despite China reporting slow growth
Annuity rates resist fall in yields with fear of US slowdown
Gilt yields lower as equities fall sharply with geopolitical tensions
 
Annuity Rates
  Age Single Joint  
  55 £4,273 £4,019  
  60 £4,695 £4,418  
  65 £5,361 £4,913  
  70 £6,172 £5,708  
£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:

Enhanced annuity rates down 3%
Enhanced annuity rates down Enhanced annuities reduce by -3.31% as gilt yields fall by 28 basis points
Annuity fall with Brexit uncertainty
nnuities fall after Brexit uncertainty Brexit uncertainty sends investors to safety of gilts lowering yields and annuities
UK annuities could rise with higher yields
UK annuities fall Yields rise by 18 basis points after improved prospect of US and China trade deal
Gilt yields rise and Trump delays tariff
Gilt yields rise as Trump delays tariffs

Donald Trump delays $200 billion of tariffs on Chinese goods pushing up yields

Retirement income up with equity rally
Retirement income recovers

Retirement income is up 7.5% benefiting from January rally of US stocks


  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©2001-19 Sharingpensions.co.uk. All Rights Reserved