He found that market volatility,
falling gilt yields and historically low interest rates are focusing minds on funding deficits, de-risking strategies and liability management in the area of defined benefits pensions.
Not exact matches
Good news is that 15 year
gilt yields increased from 2.17 % to 2.46 % last month, so we should see improved annuity rates in future as
yields rise (
gilt prices
fall).
However, annuity rates rise and
fall over time due to changes in
gilt yields, inflation and the dark magic longevity risk calculations that actuaries do to create their actuarial tables.
If a Brexit is voted for and uncertainty in the U.K. economy loom, U.K.
gilts could benefit further (prices continue to rise and
yields fall), as the Bank of England could keep rates low for longer.
Since 2001, the real
yields on Index Linked
Gilts has
fallen, so I have decided to take action.