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


10 May 2013 last updated
Pension annuity income 12.3% up as FTSE-100 index hits new high

The FTSE-100 index continues to rise closing at 6,625 for the first time since October 2007 as central banks confirm their stimulus programmes and means pension annuity income is now 12.3% higher this year based on equities alone.

The majority of people retiring remain invested before taking their pension annuity and in a falling market this can mean a significant loss of income at a critical time.

Since the beginning of the year when the FTSE-100 was at 5,897 it has increase by 728 points or 12.3% and people that track the index will find this gain is reflected in the fund when it comes to buying annuities.

Central banks such as in the US and Japan have large stimulus packages and low interest rates forcing investors to find higher returns in the equity markets which has also helped drive the 15-year gilt yields 22 basis points higher to 2.44% which will also help annuity rates.

 
Pension annuity income up with FTSE-100 index
 
  More annuity topics
  May News 2013
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Income from annuities 17.5% higher in total

Apart from the rise in equity markets UK annuity rates have also been increasing and people retiring can receive 17.5% more income from their pension fund than in January 2013.

As an example by using our benchmark for a person aged 65 using a fund of £100,000 to purchase a retirement annuity on a single life, level basis, in January this would have provided an income of £5,373 pa. The fund had it tracked the FTSE-100 index would have increased to £112,300 and annuities have also increased 4.6% resulting in a higher income of £6,316 pa.

This rise can make a significant difference over the lifetime of the individual and the Office of National Statistics (ONS) would expect a male to live for 17.8 years. This means an improvement of £941 pa would result in £16,749 more annuity income over his lifetime. For a female she would be expected to live for 20.4 years resulting in £19,196 more annuity income over her lifetime.

Gilt yields rise to 2.44% as equities reach new high

Annuity rates are based on the 15-year gilt yields and these have increased 22 basis points since the started the month at 2.22%. In general this would translate to a 2.2% increase in annuities and the impaired annuity providers are most likely to take action although the standard annuities are unlikely to change quickly.

The rise in yields has been due to a combination of factors including good US job data, no further stimulus in the form of Quantitative easing from the Bank of England and the rise of equities making this more attractive to investors than UK government bonds and gilts.

Gilt yields have been volatile this year as investors are sensitive to events that could mean a return to eurozone uncertainty and reduction in global growth. The range for 15-year gilt yields this year has been 59 basis points from 2.17% to 2.76% which would produce a 5.9% difference in annuities depending on when a person retires.

News related stories:
Annuities income boost as FTSE index and service sector improve
UK annuity income gains with FTSE-100 index 2% higher
Retirement annuity income up as FTSE-100 index reaches a new high
Annuity income lower as markets and gilts fall on Italy election deadlock
Best annuity income and markets fall 1.6% after US Fed stimulus fears
Related internet links:
Guardian - FTSE 100 hit highest since October 2007
Telegraph - FTSE100 closes above 6,600 first time since 2007
Annuity Rates
  Age Single Joint  
  55 £6,361 £5,898  
  60 £6,842 £6,244  
  65 £7,474 £6,843  
  70 £8,405 £7,660  
£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:

Annuities rise 6% to eleven year high
Annuities rise 6% to 11 year high Annuities rise 6% and gilt yields increase 90 basis points due to central bank action
Gitl yields rise 87 basis points
rise 87 basis points Gilt yields higher as investors shrug off global recession fears as base rates rise
Retirement income at record high
Retirement income soars Retirement income rises by 71.6% as yields and annuities are driven higher
Pension annuities fall on recession fears
Pension annuities fall Pension annuities fall and gilt yields are lower by -27 basis points to 2.32%
Annuity rates rise but yields weaken
Annuity rates rise 7pc last month Annuity rates rise by a record 7% for a single month but gilt yields weaken

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page
Sharingpensions.co.uk   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 Sharingpensions.co.uk. All Rights Reserved