Investors seek safe havens with tariff threats

The 15-year gilt yield decreased by -17 basis points to 1.58% during March 2018 with providers of standard annuities decreasing rates by an average -0.16% for this month and we would expect rates to fall by -0.98% in the short term if yields do not fall.

For smoker and enhanced annuity providers have increased their rates by an average of 0.02% and rates may fall by -1.72% in the short term if yields do not fall.

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   38%   14%   48% Increases of: up to 1.3%   Decreases of: up to -1.8%

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