Gilt yields rise as US-China trade deal could boost global growth

15-year gilt yields chart - Based on figures for December 2019

December 2019 Review

Standard annuities are up by 0.98% for December with 15-year gilt yields rising 14 basis points following an expectation of a phase one US-China trade deal which could boost global growth.

The 15-year gilt yield are higher by 14 basis points to 1.07% during December 2019 ending the year above one percent for the first time in six months.

Providers of standard annuities increasing annuity rates by an average 0.98% for this month and we would expect rates to reduce by 0.42% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers have increased their rates by an average of 0.95% and rates and we would expect rates to increase 0.44% in the medium 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   91%   4%   4% Increases of: max 2.6%   Decreases of: max -0.5%

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