High gilt yields raise income drawdown

Gilt yields have risen 1% since June, according to Skandia, the savings product provider, and are projected to stay at 5.25% next month. Gilt yields reached 4.5% last July, 4.25% in July 2005 and 5% in July 2004. Skandia says advisers can increase their clients’ income by around 5% a year by taking out an income drawdown contract while high gilt yields are available. Colin Jelley, head of tax and financial planning at Skandia, says: “Just as every Bank of England base rate change creates winners and losers, changes in gilt yields also have numerous impacts. For a 65 year old male about t...