Anyone who has been getting Annuity quotes for the past few months will have seen how much rates have dropped recently. The question on the lips of those thinking about retiring soon is of course, when will Annuity rates rise?

To answer this we must look at why rates have fallen over the past few months. Most of us know that the long term trend in Annuity rates has been downward. This has mainly been caused by increased longevity in the UK. Simply put, we are living longer and our pension pots need to stretch further.

However, in recent months three additional factors have come in to play.

Firstly as the UK has been seen as a safe haven and not at risk of defaulting, Gilt rates have dropped significantly. Annuity providers use Gilts to back their Annuities and if Gilt rates fall, then it follows that your Annuity quote will be lower. Read more →