Rising Gilts Bad for Annuities

FUTURE PROOF: Annuity rates soared in 2013 thanks to the falling prices of government bonds, but this trend has reversed which is bad news for retiring workers

Emma Wall 13 February, 2014 | 11:24AM
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Annuity rates increased significantly last year – the first time that retirement income had increased since 2007. But 2014 is off to a bad start, as rates have already fallen in the month of January.

Those approaching retirement only get one opportunity to secure the rate at which they secure their retirement income, so this is bad news for any workers retiring in the near future.

After falling to an all-time low in March 2013, annuity rates rose 10% over the course of 2013 thanks to rising Gilt yields and increased competition in the annuity market. 

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About Author

Emma Wall  is former Senior International Editor for Morningstar

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