Gilt yields end lower for the month

The 15-year gilt yields decreased to 1.62% lower by 17 basis points for the month. With uncertainty in December investors moved to the safety of treasury notes, gilts and bonds following the terror attacks including the death of the Russian envoy is killed and data for US home sales showed a 2.5% fall in November.

Standard providers increase rates by an average of 1.02% and we would expect in the short term rates may decrease by 2.72%.

For smoker and enhanced annuity providers increased their rates by an average of 0.30% on average and in the short term rates may decrease by 2.00%.

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   54%   10%   36% Increases of: up to 5.9%   Decreases of: up to 2.1%

Fig 1: Annuity rate changes for the whole market

Fig 2: Change in standard rates last month compared to gilt yields

Fig 3: Change in enhanced rates last month compared to gilt yields