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


22 October 2013 last updated
UK annuity rates under pressure as yields fall after poor US jobs data

Gilt yields have reduced by ten basis points after the 148,000 US jobs added was below target with investors expecting the Federal Reserve to delay tapering making it unlikely that UK annuity rates can improve in the short term.

Annuity rates are primarily based on the 15-year gilt yields and as a general guide a 10 basis point change in yields would result in a 1.0% fall in annuity rates.

Yields had increased this year from 2.31% to 3.38% reducing to 3.05% after uncertainty in the US with providers of both standard and impaired annuity already lowering rates in response.

Since December 2012 annuities have increased by 10.9% whereas yields are up by 7.2% suggesting rates could fall by up to 3.7% in the long term.

Providers may hold their position while yields remain over the psychological 3.0% as there is much volatility in the market with investors trying to guess which direction the US is going with their policy over their stimulus.

 
UK annuity rates under pressure
  Poor US jobs data sends gilt yields lower as investors buy bonds pressuring UK annuity rates
  More annuity topics
  October News 2013
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2016
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 
US jobs data suggest recovery is faltering

Investors are betting that the US Federal Reserve does not taper stimulus and the $85 billion per month Quantitative easing continues to buy bonds keeping the prices high and preventing yields from rising and increasing pressure on UK annuities.

US data shows 148,000 jobs were added in September reducing the unemployment rate to 7.2% down from 7.3% in August. The figure was lower than the expected 180,000 suggests the recovery is losing momentum. It could also be due to the US debt ceiling crisis where government closed a number of services which may have had an impact on employers deferring recruitment until the crisis was resolved.

The budget issues are not resolved and must be reviewed again in January 2014 with possibly another display of political brinkmanship unsettling markets. The government shutdown may have reduced economic activity by $24 billion according to the credit agency Standard & Poor's which would reduce growth by 0.6% in the forth quarter.

Equity market higher benefits people retiring

Equity markets moved higher with the FTSE-100 index up 41 points at 6,696 and the Dow Jones 75 points higher at 15,468 in anticipation of stimulus continuing even though data suggesting a slowing economy should negatively impact on equity markets.

Since reaching a recent low of 6,338 the FTSE-100 index is now 5.6% higher and this will benefit anyone retiring where they remain invested in equities that track the index. As an example, for someone aged 65 with a fund of £100,000 they can receive an income from a single life, level annuity of £6,019 pa and with the increase in equities this would improve their fund to £105,600 and improve their income by £337 pa to £6,356 pa.

The Office of National Statistics (ONS) would expect a male to live for 17.3 years and he will have £5,830 more over his lifetime. For a female she can expected to live for 20.4 years increasing her income by £6,874.

For people buying their annuity now the recovery in equities will have offset the recent fall in annuity rates so now is a reasonable time to take benefits while waiting until next year may experience volatility in January as the US negotiate their debt ceiling.

News related stories:
Pension annuities to recover as US debt ceiling deal is agreed
UK annuity threat as yields fall with looming US debt ceiling
Annuity Rates stabilise as US Fed delays tapering stimulus
Retirement annuities threat as yields fall on UK and US stimulus plans
Related internet links:
BBC - US added 148,000 jobs in September
Telegraph - Fed likely to delay tapering with US jobs data
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