Billy Burrows on the storm brewing for annuities

Annuity rates have been falling almost continuously since 1990, the year in which I first started keeping records of them. In 1990, the annuity rate for a 65-year old man was more than 15.5%; today it is less than 6.5%, a fall in excess of 50%. Back then the yield on 15-year gilts was greater than 11%; today it is around 3%. And inflation in 1990 was 10% plus, whereas today it is around 5%. However during August 2011 annuity rates hit their lowest levels since 1990 and matters were made worse because of the so-called double whammy of falling annuity rates and falling equity prices. ...