gilts

The Bank of England's decision today to pump an extra £50bn into the UK economy is likely to drive annuity rates down further, insurers have warned.

National Savings and Investments (NS&I) will reduce the interest rate on its direct saver accounts by 0.25% from today.

International investors are buying record amounts of UK government bonds as the Bank of England's £75bn QE programme spurs demand, with the yield on the ten-year gilt hitting a new record low.

Markets have struggled to gain further ground after the European Central Bank announced it had lent almost €500bn to banks in a three-year liquidity operation.

We look at key themes and events that have impacted investment over the past year.

Pensioners retiring today are 62% worse off than those who retired 20 years ago because of falling gilt yields.

Annuity rates have fallen across the board for December as gilt yields have plunged to record lows.

The Cautious Managed sector accounted for more than half of total sales on Cofunds in October in its best-ever monthly showing as advisers continue to favour outsourcing solutions.

Historically low gilt yields have driven down the incomes available via annuities or drawdown by almost a quarter, Skandia said.

The lastest round of quantitative easing (QE) has made gilts more expensive and may drive international bond investors to cash in on the asset class, fund managers warns.