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

31 May 2013 last updated
UK annuity rates could rise 3% as gilt yields end on a high

Standard annuity rates in the UK could increase by up to 3% and impaired rates by up to 2% after gilt yields have recovered by 35 basis points in the month as investor confidence increases with improved economic results.

Annuity rates are primarily based on the 15-year gilt yields and a 35 basis point rise in yields will result with up to 3.5% increase in annuities by providers.

Impaired annuity providers are usually the first to react such as from Just Retirement, Partnership and Liverpool Victoria and they tend to make alterations to their rates on a daily basis. Standard annuities are not increased as often although decreases are more frequent.

Positive economic data in May has increased investor confidence to move funds away from gilts reducing the price and increasing yields with the FTSE-100 index higher by 153 points at 6,583 and the Dow Jones higher by 275 points at 15,115.

UK annuity rates 3% rise possible
  More annuity topics
  May News 2013
  News & articles
  Archive news stories
  Flexi-access drawdown
  Annuity rates tables
  Outlook for 2019
  Annuity rates charts
  15-year gilt yields
  Latest annuity rates

Annuity rates 5.5% higher since January

UK annuity rates have improved since reaching all time lows in January 2013. Our benchmark example for a person aged 65 with a fund of £100,000 buying a single life, level annuity would have received £5,373 pa and this has increased 5.5% or £298 pa reaching £5,671 pa today.

In the short term standard annuity rates could increase by a further 3.0% although taking a medium term view of six months not all annuities are likely to improve. Single life rates on a level basis have been aggressively increased by the leading providers such as Legal & General, Aviva and Canada Life have have matched the change in gilt yields over this period of time. On the other hand single life escalating and all joint life annuities do have further room for increases over six months by 2% on average and joint life with escalation up to 4.5% increases are possible.

Impaired annuity rates can increase in the short term, however, over the medium term of six months rates are higher than expected when compared to gilt yields with decreases of about 1.5% likely and joint life with escalation being lower by about 3%.

Equity markets volatile with economic fundamentals

Although annuities will benefited from rising gilt yields equity markets have tumbled over the last week after the FTSE-100 index reached a high of 6,840 and is now 257 or 3.7% lower at 6,583 although remains up for the month. This means people that remain invested in funds that track the FTSE-100 index before they buy their annuity will find any increase in annuity rates will be offset by a fall in their fund value.

After significant increases in the Japanese Nikkei index reaching a five and a half year high last week it has reduced 8.3% and the Dow Jones is also lower by 294 points at 15,115. The falls are due to concerns about the economic fundamentals and if the high equity markets are justified. This makes it difficult for markets to exceed previous highs if investors fail to see evidence of improving economic data from around the world.

Where there are gains in pension funds anyone retiring should consider converting their equity funds to cash to avoid any last minute falls before buying their pension annuity.

News related stories:
Impaired annuity rates up to 4% higher as gilt yields rise
Retirement annuity risk as gilt yields fall after ECB criticism
Enhanced annuity rates fall by 1% as Partnership reacts to gilt yields
Latest annuity rates may fall 4% as gilt yields collapse after US jobs data
Impaired annuities reduce 1.5% from leading providers on poor yields
Related internet links:
BBC - Japan's Nikkei dives a further 5%
Telegraph - FTSE 100 gives up gains
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