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


6 November 2015 last updated
Annuity rates lower as yields up on Fed interest rate rise hopes
15-year gilt yields chart
Based on figures for October 2015
15-year gilt yields October 2015
 

Providers have reduced their annuity rates in October just as yields increase following hints from the US Federal Reserve that interest rates could increase in December.

Standard rates:  
annuity rates up 0.71%
Enhanced rates:  
annuity rates up 0.87%
Gilt yields:  
annuity rates up 13 basis point



 
  More annuity topics
  Quarter 4 News 2015
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2022
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates
 

Providers send impaired annuities lower

Providers of standard, smoker and impaired annuities have reduced rates during the month of October by up to 2.1%.

Towards the end of the month the 15-year gilt yields were up after the US Federal Reserve hinted they may finally raise interest rates in december. For the month yields were 13 basis points up and annuity rates are now expected to increase if investors hopes of higher US interest rates can be fulfilled.

Standard providers lowered rates by 0.71% and we would expect to see a annuities higher by 2.01% in the short term and in the medium term of 3 months annuity rates will increase by 0.85% if yields do not improve further.

Smoker and enhanced annuity providers decreased their rates by 0.87% on average with an increase of 2.17% possible in the short term and in the medium term of 3 months we can expect an increase of 2.87%.

Equity markets started at 6,062 and increased by 299 points to end at 6,361

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
annuity rates increase   6%
annuity rates no change   14%
annuity rates decrease   80%
Increases of:
up to 1.1%

  Decreases of:
up to 2.1%
  Fig 1: Annuity rate changes for the whole market


The majority of rates increased with 6% rising, 80% remaining unchanged and 14% decreasing.

What happened to standard rates

Below shows a fund of £100,000 with the change in standard annuity rates for single and joint pensioners from age 55 to 75 with different annuity options such as level or escalating over 1 month compared to gilt yields:

Standard annuity 1 month changes
Fig 2: Change in standard rates last month compared to gilt yields


Standard annuities all reduced with the largest for escalating and joint life rates by 1.0% on average. The highest fall was up to 1.4% for those aged 65 on a single life with 10 year guaranteed period and level basis.

What happened to enhanced rates

Lifestyle smoker and enhanced annuities have decreased significantly across the board for all types of annuities and ages.

Enhanced annuity 1 month changes
Fig 3: Change in enhanced rates last month compared to gilt yields


For enhanced and smoker providers rates mainly decreased with the highest of 2.1% for those aged 75 on a single life basis level basis although there was a small increase for 100% joint life rates for those aged 65 to 70.

For the latest updates see Annuity Rates Review.

Changes to the 15-year gilt yields

The yields change for the month was from 2.10% to 2.23% or 13 basis points. Fig 2 below shows the daily 15-year gilt yields and the increase or decrease from the previous day's close:



15-Year Gilt Yields - October 2015
      Thurs 1st Fri 2nd
     
2.08%
gilt yields down   0.02
2.06%
gilt yields down   0.02
Mon 5th Tues 6th Wed 7th Thurs 8th Fri 9th
2.14%
gilt yields up   0.08
2.14%
gilt yields no change
2.17%
gilt yields up   0.03
2.17%
gilt yields no change
2.20%
gilt yields up   0.03
Mon 12th Tues 13th Wed 14th Thurs 15th Fri 16th
2.17%
gilt yields down   0.03
2.17%
gilt yields no change
2.12%
gilt yields down   0.05
2.12%
gilt yields no change
2.14%
gilt yields up   0.02
Mon 19th Tues 20th Wed 21st Thurs 22nd Fri 23rd
2.18%
gilt yields up   0.04
2.20%
gilt yields up   0.02
2.15%
gilt yields down   0.05
2.15%
gilt yields no change
2.21%
gilt yields up   0.06
Mon 26th Tues 27th Wed 28th Thurs 29th Fri 30th
2.17%
gilt yields down   0.04
2.11%
gilt yields down   0.06
2.16%
gilt yields up   0.05
2.25%
gilt yields up   0.09
2.23%
gilt yields down   0.02
  Fig 2: Daily 15-year gilt yields and changes


News related stories:
Gilt yields and equities fall as Federal Reserve unclear about rate rise
Best annuities could rise as Federal Reserve delays raising rates
UK annuities could rise as gilt yields make strong recovery
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