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

11 January 2016 last updated

Latest annuity rates could fall as gilt yields reach 12-month low

Latest annuity rates are under threat of falling as the 15-year gilt yields reach their all time low of 1.68% after a volatile market before recovering to end the day at 1.77%.

Annuity rates are primarily based on the 15-year gilt yields and this year yields have reduced by 52 basis points.

As a general rule a fall of this amount would result in annuity rates reducing by 5.2% at some point in the future.

Standard and impaired annuity rates have already reduced significantly at the end of last year by up to 6% following new EU rules introduced called Solvency 2 aimed at improving the capital requirements of providers.

Providers may have a buffer to a certain extent and as long as yields recover may not need to decrease rates as severely as would be expected in the short term.

Standard annuity providers such as Hodge Life and Canada Life have reduced their rates by 2-3% during the month of February.

Latest annuity rates could fall
  15-year gilt yields fall as far as 1.68% before recovering but still threaten annuity rates
  More annuity topics
  Quarter 1 News 2016
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Gilt yields reached their all time low

The 15-year gilt yields did reach an all time low of 1.68% briefly before recovering to 1.77% after a volatile days on both the equity and gilts market. The last time this level was reached was January 2015 following global uncertainty as the European Central Bank (ECB) announced the start of their Quantitative Easing with €1.1 trillion.

This time it is the fear of a global economic slowdown starting in China and lower oil prices that have sent the markets lower with the FTSE-100 index closing at 5,537.

Annuity rates threat as yields fall
Fig 1: Chart comparing annuity rates and 15-year gilt yields

The above chart shows how annuity rates remained strong during the summer of 2015 with reasonably buoyant gilt yields compared to this time last year.

Before the new Solvency 2 rules started on 1 January 2016 the providers reduced their rates and since then yields have reduced close to the all time lows. In the medium term standard annuities are expected to reduce about 2.65%, smoker rates by 1.38% and impaired annuity rates by about 0.6%.

Impaired providers have extra margin and have not reduced their rates to the degree of standard annuity providers due to more aggressive reductions in rates at the end of last year.

News related stories:
Annuity income lower as markets fall on global slowdown fears
Impaired annuities lower by up to 6% ahead of Solvency 2 start date
Annuity rates uncertain as US Fed signals interest rate rise more likely
Pension annuity rates up over 5% as providers are more competitive
Annuity Rates
  Age Single Joint  
  55 £3,723 £3,370  
  60 £4,192 £3,911  
  65 £4,920 £4,378  
  70 £5,769 £5,246  
£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:

Equities rally on hopes of Covid-19 vaccine
Equity markets rally

Equity markets rallied with news of positive drugs trial for a Covid-19 vaccine

Annuities could rise as markets rebounds
Equity markets and gilt yields rebound

Strong rise in US equities as economic data sends markets and yields higher

Annuity rates higher as yields stabilise
Annuity rates rise despite lower yields Annuity rates higher as providers more confident gilt yields return to stability
Annuities rise after Covid-19 trials
Annuities and equities rise Global equities and annuities increase after reports of successful Covid-19 trials
Annuity rates could rise with volitile yields
Annuity rates could rise Coronavirus has threatened growth with volitile yields and annuities could rise

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook
  Facebook Page Twitter Page   This website is for marketing purposes only and does not provide specific financial or legal advice. Website security issued by GeoTrust and Equifax. Copyright©2001-20 All Rights Reserved