Annuity Rates, Annuities, Pensions, Divorce
Equity release lifetime mortgages
Home News Annuity Rates Annuities Pension Annuity Impaired Annuity Annuity Quotes Pensions Divorce Resources

19 April 2012 last updated
Smoker annuity rates fall despite rise in gilt yields

Providers of smoker annuities are aggressively reducing their annuity rates even though gilt yields have continued their rise during the week.

Smoker annuity rates have reduced by between 1.0% and 2.0% with the largest decreases from Liverpool Victoria and smaller decreases of 0.3% from Reliance Mutual.

The decreases in annuities were despite an increase in the 15-year gilt yields over this week of 13 basis points to 2.70% of which 3 basis points was the increase for today. Generally a 13 basis point rise in yields would result in a 1.3% increase in rates.

This means the gap between gilt yields and smoker annuities is widening and these rates should be higher in the short term by 3.0%. This discrepancy is greater if taken over a longer time period of three months and is 4.5%. See Annuity Rates Review for the latest updates.

Smoker annuity rates fall
  More annuity topics
  April News 2012
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Providers aggressive at reducing smoker annuity rates

Smoker annuity providers are being aggressive at reducing their rates compared to standard pension annuities where providers are maintaining rates closer to the changes in the gilt yields. The difference between rates and yields is much smaller although we would still expect standard annuity rates to increase by 0.7% in the short term and by 1.5% in the medium term. Impaired annuities have been volatile over during this year and have followed the gilt yields closely so there is not a great differential.

The increase in UK 15-year gilt yields may be due to an unexpected strong demand for Spanish bond auctions. Investors purchased all the 2.5 billion euros of Spain's bonds with the 10-year bonds offering a yield of 5.74% which is a higher yields than earlier in the year. The demand was double the actual amount issued so there is confidence in Spain despite the concern over the economy. The yields of Spanish 10-year bonds is 2.7 times greater than Uk government 10-year bonds so if investors at the moment must perceive this risk as being acceptable after measures taken to increase the rescue fund.

Even so this position could change quickly and the International Monetary Fund (IMF) has already warned that the debt crisis in the Eurozone may return. The IMF is still trying to build a larger emergency fund with more than $400 billion in resources to provide a global firewall against sovereign default, although in practice it is the Eurozone that is most likely to need the fund as concern increases for Spain's banks.
UK Providers may be negative about gilt yields although smoker annuity rates appear to be poor value at the moment.

News related stories:
Impaired annuity rates increase despite UK double dip recession
Annuity rates set to fall with decreasing gilt yields
UK annuity rates fall as Eurozone fear spreads to markets and gilts
Annuity rates fall to lowest levels as gilt yields fail to improve
Enhanced annuity rates fall by up to 3% as gilt yields reduce
Annuity Rates and Pensioner Income Now 43% Lower
Related internet links:
Guardian - IMF fears not enough funds for debt crisis
Guardian - Risk to global economic recovery says IMF
Call 020 8816 7501 for a quote
Annuity Rates
  Age Single Joint  
  55 £4,433 £4,127  
  60 £4,914 £4,660  
  65 £5,563 £5,094  
  70 £6,272 £5,976  
£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:

Gilt yields lower as equities fall
Annuity Rates December 2018 Gilt yields are lower with geopolitical tension between the US and China
Annuity rates resist fall in gilt yields
Annuity rates resist fall Annuity rates are steady following gilt yields fall on fears of US slowdown
Retirement income down 14%
Retirement income down Brexit turmoil and equity volatility sends investors to the safety of gilts and bonds
Drawdown numbers hit record high
Pension drawdown withdrawals hit record high

Data from HMRC shows a record 5.9bn accessed in 2018 using drawdown

  Follow Us:
You can follow the latest annuity updates on Twitter or as a fan on Facebook and Google+
  Facebook Page Twitter 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©2001-19 All Rights Reserved