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back to annuity rates december
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Annuity Rates Chart for December 2011
Fig 1 below shows the change in annuity rates chart over the last 12 months and the rate for
December 2011: |
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| Annuity Rates Chart for £100,000, male, age 65, single, level |
| Latest rate: |
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1 month change: |
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3 month change: |
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6 month change: |
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1 year change: |
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| £6,015 pa |
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£43 / 0.7% |
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£86 / 1.4% |
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£791 / 11.6% |
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£537 / 8.2% |
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| Fig 1: Annuity rates chart of income for 12 months to December 2011 |
In fig 1 the annuity rates chart is our benchmark example with £100,000 to purchase an annuity for a 65 year old male on a single life, level and no guaranteed period.
For December 2011 our benchmark shows that the annuity rates chart has increased slightly right at the end of the month by £43 pa or 0.7% to its current level of £6,015 pa. During November the 15-year gilt yields reduced by 20 basis point and
our benchmark example reduced by 1.99% which matches the gilt yield reduction for November. As a general rule a 25 basis point change in the gilt yields will result in a 2.50% change in the annuity rates so the providers corrected the annuity rates accurately for our benchmark example. Across the board standard annuity rates reduced by 2.27% with some annuities down 5.6% so on average annuity rates have reduced beyond the gilt yield reduction. This suggests that annuity rates could rise by 1.0% across the board if gilt yields remain above 2.80% during December.
The reduction in the standard annuity rates chart was also duplicated by the smoker annuity rates with a decrease of 2.05% across the board although the reduction range was not as great as for standard annuity rates during November.
There is more optimism in the equity and gilts market that the Eurozone can find a solution for the debt crisis and this is being reflected with rising equities and UK gilt yields which the annuity rates chart could reflect with higher rates. |
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