The UK has lost its AAA rating with Moody's downgrade after continued weakness and poor growth prospects although this is unlikely to result with investors moving funds away from UK gilts due to limited alternatives so retirement annuities will not gain.

It was thought that a loss in the AAA credit rating would mean investors looking for the highest grade sovereign debt would need to move their funds elsewhere, reducing the price of gilts and increasing yields, however, the majority of other countries have already been downgraded.

Given the options the UK is still considered a safe haven compared to other eurozone countries and gilt yields have remained unchanged and for annuities this means they are likely to remain unchanged.

As annuity rates are based on the 15-year gilt yields any increase in yields will result in higher retirement annuities in time although providers can be slow at increasing rates.