Gilt yields at record 5.6pc falls after lower inflation and Trump deal hopes

15-year gilt yields chart - Based on figures for May 2026

Annuity Rates UK - May 2026 review

Gilt yields reached a record 5.60% on 15 May 2026 before reducing by -38 basis points as UK inflation is lower at 2.8% and President Donald Trump says a deal with Iran is very close.

Standard annuity rates increased slightly by +0.86% and providers may reduce annuities over the summer which are mainly based on yields if these remain at current or reduce further.

The 15-year gilt yields reduced -38 basis points to ended the month at 5.22% after tension in the US-Iran reduced. Trump calmed the market by saying a deal could be signed in days.

The deal would include opening the Strait of Hormuz allowing shipping through with oil and fertaliser to countries such as Japan, Asia and India depending on the supplies from the Middle East.

UK inflation was lower than expected with the consumer price index (CPI) at 2.8% in May reducing from 3.3% the previous month.

This has helped to lower gilt yields further for May although inflation is expected to rise soon due to Brent crude oil price at $91 per barrel on 29 May 2026 and further delays in any US-Iran deal.

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Providers of standard annuities increased rates by an average of +0.86% this month and we would expect rates to fall by -2.96%% in the medium term if yields remain at current levels.

For smoker and enhanced annuity providers increased their rates by an average of +0.60% and we would expect rates to fall by -2.70% in the medium 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   90%   0%   10% Increases of: max 2.3%   Decreases of: max 1.5 %

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