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

5 July 2012 last updated
Annuity rates under threat as Bank of England injects £50 billion of QE

With another round of £50bn Quantitative Easing annuity rates are likely to reduce when gilt yields fall this month.

The Bank of England is to inject another £50 billion into the economy using Quantitative Easing (QE) bring the total to £375 billion. The likely effect of this will be to increase the price of gilts and reduce the yield and as annuity rates are based primarily on the 15-year gilt yields it is likely that annuities will fall over time.

The European Central Bank (ECB) has cut interest rates from 1.0% to 0.75% and reduced the rate banks can receive on overnight deposits with the ECB from 0.25% to zero.

With the economy in a double dip recession and no signs of growth, the fall in inflation and the Eurozone debt crisis the Bank of England is pessimistic about the immediate future. The measures taken today may be one of a series to help stimulate the economy.

Annuity rates threat with more QE
  More annuity topics
  July News 2012
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

QE will reduce annuity rates further

Gilt yields reduced today with the 15-year gilt yields down 5 basis points at 2.23%. Apart from pensioners retiring and purchasing their annuities final salary pension scheme will also suffer with further quantitative easing. For these schemes the funding levels are based on the yields to provide future pension income paid by the scheme and as yields fall so the funding required increases. This means that in the short term schemes operate with a deficit which has increased to over £200 billion in 2012.

Pensioners retiring today should be prepared for lowering annuity rates as Quantitative Easing is applied although providers may not lower their rates immediately. Gilt yields are likely to be volatile in the short term and if the Bank of England have a series of QE measures this year annuity rates are likely to be affected significantly towards the end of the year. The other threats to annuities will be Unisex rates and Solvency 2.

With Unisex rates males will see their income fall by as much as 6% although in theory females should expect a rise, this may not be significant as providers may start to close the gap before the end of the year. Solvency 2 is more complex with providers required to provide greater resources against corporate bond defaults and the effect may reduce annuity rates by up to 8%. These European measures coupled with QE can only help to push annuity rates lower by the end of 2012.

News related stories:
Annuity rates may lower if UK inflation fall leads to more QE
UK annuity rates lower with new QE as inflation falls
Standard annuity rates fall with Bank of England stimulus package
Retirement income from annuities may be hit with QE measures by BoE
UK pension annuity income may reduce with lower inflation and QE
Related internet links:
Guardian - Bank of England boosts QE by £50bn
BBC - Bank of England injects £50bn into economy
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   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 All Rights Reserved