Annuities rise 6pc with higher gilts after Trump tariffs and defence spending

15-year gilt yields chart - Based on figures for March 2025

Annuity Rates UK - March 2025 review

Annuity rates rise by up to +6.2% for certain ages and annuity features as 15-year gilt yields reach high of 5.17% on 27 March 2025 after Trump tariffs.

Higher gilt yields is in part due to President Donald Trump's trade war imposing 25% tariffs on 50% of all goods from Mexico and 25% tariff on 62% of all goods from Canada.

In Europe the EU has realised the US is not dependable with new plans to invest €800bn in defence spending over the four years with investors demanding a higher return for government debt.

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Annuity rates rise 2pc as gilt yields fall expecting lower interest rates

Providers of standard annuities increased rates by an average of +2.13% this month and we would expect rates to fall by -0.13% in the short term if yields remain at current levels.

For smoker and enhanced annuity providers increased their rates by an average of +3.74% and we would expect rates to fall by -1.74% in the short term if yields do not fall.

Fig 1 below shows the annuity rates changes for the whole market and the proportion that have either increased, decreased or or did not change. It also shows the range of the changes of the annuity rates over the last month:

Annuity Rates Changes Increase No change Decrease   99%   1%   0% Increases of: max 6.2%   Decreases of: max 0 %

Fig 1: Annuity rate changes for the whole market

Fig 2: Change in standard rates last month compared to gilt yields

Fig 3: Change in enhanced rates last month compared to gilt yields