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Annuity Rates Changes for April 2012
Last reviewed: 19th April 2012
Fig 2 below shows annuity rates changes over 12 months compared to rates for March 2012: |
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| Annuity Rates Changes for £100,000, male, age 65, single, level |
| Latest rate: |
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6 month change: |
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1 year change: |
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3 year change: |
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7 year change: |
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| £6,112 pa |
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£19 / 0.3% |
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£701 / 10.2% |
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£955 / 13.5% |
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£1,076 / 14.9% |
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| Fig 2: Annuity rates changes over 12 months to April 2012 |
Pension income for April remains level
Fig 2 shows the annuity rates changes for our benchmark example for a fund of £100,000, male aged 65 with a single life, level annuity and no guaranteed period. Last month annuities increased and this gives the impression that a low has been reached.
For our benchmark the pension income is now £6,112 pa from a low of £5,972 pa back in November 2011
up £140 pa or by 2.3%. Standard annuities have been particularly strong in the last few months although compared to gilt yields in the short term could decrease by 0.8% across the board if gilt yields fall. Last month was the second since June 2011 that the 15-year gilt yields increased with a gain of 13 basis points. See Annuity Rates 2012 for the latest updates.
Over the longer term annuity rates remain low with a drop in income for a pensioner of £955 pa over three years or 13.5% and £1,076 pa or 14.9% over seven years.
Markets remain volatile as investors relise the Eurozone debt crisis has not been solved and that Spain is becomming a greater risk. This coupled with mixed economic news from the US and China has resulted in volatile gilt yields which could threaten annuity rates in the short term.
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