UK gilts draw record foreign investment and yes, this does affect you!

New figures have shown that international investors bought a record £28.87 billion of UK gilts in October and November of last year; the highest two month figure since the Bank of England started to collect data in 1982. Demand Demand for UK gilts has been increased partly due to the Bank’s program of Quantitative Easing (QE) as well as with the Eurozone crisis, which has caused investors to see the UK, which still has a AAA credit rating and is outside the Euro, as a safe haven. Many investors are concerned about the stability of European banks and the low interest rates currently ...

Falling retirement incomes Part 2: Lower gilt yields affect Income Drawdown investors

In the second of our articles this month focusing on falling retirement incomes we look at how lower gilt yields will lead to lower incomes being available from Income Drawdown products. The problem The problem affects both those people already in Income Drawdown and those who are considering using it as an alternative to an Annuity purchase. The maximum income which can be taken from an Income Drawdown plan is set by the GAD (Government Actuarial Department) tables, which take into account three things, namely, age, gender and crucially long term gilt yields. Gilt yields have fallen during the course of 2011, consequently so ...