Weak gilt yields shave 25% off pension incomes

Skandia said the latest round of quantitative easing has put pressure on gilt yields, which has driven down the Government Actuary Department (GAD) rate used to calulate pension payments. GAD is the rate pension providers use to calculate annuity rates, and the rate at which investors can withdraw pension funds via capped drawdown. Combined with stock market losses over the summer, retirement incomes are down by almost a quarter since April, Skandia said. According to the life company's research, if an individual's pension fund mirrored the behaviour of the FTSE 100 - which fell fr...