Record-high annuity rates drop as bond markets calm
The annuity boom has come to a close and payouts will drop by thousands of pounds in the coming weeks as chaos in the bond market fizzles out.
Soaring yields on British government bonds, known as gilts, have tapered off since former prime minister Liz Truss rowed back on her mini-Budget. The bond market sell off had benefited those buying annuities, boosting the income paid out by thousands of pounds.
However, now a 65-year-old with £100,000 can only secure an annual annuity income of £6,534 from the provider Scottish Widows, down from £6,872 last week, a drop of 5pc.
Rival provider Canada Life cut its rate by £100 from £6,830 last week to £6,730.