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


29 April 2022 last updated

Annuity rates soar 19pc to highest level in six years as gilt yields rise
Annuity rates soar19%
  Annuities have increase by 19% since January 2021 as 15-year gilt yields rise 156 basis points.
 
  More annuity topics
  First half 2022 news
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Annuity rates soar 19% since January 2021 at the height of the lockdown following the rapid rise in gilt yields up 156 basis points of the same period as central banks react to inflation.

Providers have increased pension annuity rates by 18.9% after reaching a low in January 2021 with an 11.9% rise in our benchmark annuity rate already this year.

The rapid rise is due to investors selling bonds and gilts seeking a higher return as inflation around the world rises due to economic activity returning after lockdown at the same time the Russian-Ukraine war forcing commodity prices higher. In the UK the Consumer Prices Index (CPI) is at 7.0% in March 2022 a 30-year high, and in the US inflation has reached 8.5% the highest level in 40 years.

Find related news here:
Annuities at 3 year high as yields bounce back ahead of rising rates
Pension annuities rise 9pc ahead of higher base rates in 2022

For our benchmark annuity rate reached in January 2021 was £4,786 pa during the height of the Covid lockdown and has increased by £905 pa to £5,691 pa in April 2022.

The 15-year gilt yields were at a low point of 0.54% in January 2021 and increased to 2.20% by 19 April this year before ending the month at 2.10% a rise of 156 basis points.

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


The above chart shows annuity rates for our benchmark of a person aged 65 years old with a fund of £100,000 buying a lifetime annuity on a single life, level basis and compares this to the 15-year gilt yields.

The 15-year gilt yields started to rise rapidly in December 2021 and since January 2021 has increased 15.60%. In contrast, annuity providers were slow to react and remained flat until February 2022. In the last 3 months provider rates have been rising quickly and now exceed the rise in gilt yields since January 2021 up 18.91%.

Since January 2021 our benchmark annuity income increased £905 pa from £4,786 pa to £5,691 pa.

In terms of total income during their life, the Office of National Statistics (ONS) would expect a male to live for 18.5 years and he will have £16,742 more over his lifetime by taking an annuity now compared to a year ago. For a female she can expected to live for 20.9 years increasing her lifetime income by £18,914.

The Bank of England has increased base rates from an all time low of 0.1% up to 0.75% and is expected to raise this again to 1.0% on 5 May 20022.

The unfolding events with the Russian-Ukraine war, extensive lockdowns in China slowing growth could see inflation rise further with higher base rates.

This could result in 15-year gilt yields rising further although investors have already taken account of future rises in base rates by central banks during this year. Annuity rates are likely to remain at current levels with incremental improvements with improvements in gilt yields.

News related stories:
Gilt yields rise 20 basis points as Federal Reserve to raise rates
Annuity rates higher as gilt yields reach recent highs on inflation fears
Gilt yields higher as central banks may raise rates faster than expected
Annuity Rates
  Age Single Joint  
  55 £4,574 £4,142  
  60 £4,961 £4,610  
  65 £5,691 £5,238  
  70 £6,478 £6,098  
£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:

Annuity rates rise due to inflation fears
Gilt yields rise over 2pc 15-year gilt yields are up 28 basis points as investors expect rise in base rates
Annuity rates soar 19pc to high for 6 years
Annuity rates soar19% Annuity rates reach a six year high up 19% since January 2021 as gilt yields rise
Gilt yields rise 20 basis points
Gilt yields rise 20 basis points Federal Reserve to raise rates more aggressively with gilt yields up to 1.82%
Annuities are at a 3 year high
Pension annuities could fall with Omicron variant Higher gilt yields sends annuities to a three year high up 11.1% in the last year
Pension annuities rise 9pc over a year
Pension annuities rise 9pc Pension annuities rise almost 9pc as yields increase ahead of higher base rates

  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©2001-22 Sharingpensions.co.uk. All Rights Reserved