Annuities mostly unchanged after lower base rates with yields in narrow range

15-year gilt yields chart - Based on figures for December 2025

Annuity Rates UK - December 2025 review

Annuity rates were 81% unchanged in December 2025 after Bank of England lower base rates with the 15-year gilt yields moving in a narrow range of 10 basis point and closing slightly up at 4.88%.

In the US stronger GDP data in the third quarter was ahead of expectations producing an annualised rate of 4.3% suggesting fewer interest rate cuts from the Federal Reserve in 2026.

With UK consumer price index (CPI) reduced to 3.2% in November 2025 and the Bank of England reduced interest rates by -0.25% from 4.0% down to 3.75% in December 2025.

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Providers of standard annuities decreased rates by an average of -0.12% this month and we would expect rates to rise by +0.52% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers decreased their rates by an average of -0.17% and we would expect rates to rise by +0.55% in the short term if yields remain at current levels.

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   1%   81%   18% Increases of: max 0.1%   Decreases of: max 2.3 %

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