Sam Brodbeck wrote a very good piece in the Telegraph on 23rd December looking at the prospects for annuities in 2017.
One of his points is that annuity rates may rise in 2017 if inflation increases in response to Brexit and Trump's economic policies.
Sam writes -Annuity rates are at rock bottom levels, but with Donald Trump's election likely to fuel inflation, many think rates could be about to improve.
Financial markets have so far interpreted Donald Trump’s election as likely to fuel rising prices after years of very low inflation.
His promise to spend huge sums on national infrastructure projects - coupled with the US Federal Reserve’s recent interest rate hike - should in turn lead to a rise in the yields on government bonds, both in America and Britain.
I am quoted 'Billy Burrows, an annuity expert at Retirement IQ, an advice firm, explained that the 15-year gilt, seen as a benchmark rate, is likely to end the year yielding 2pc. He said for every percentage point increase in gilt yields, annuity rates rise by around 7pc. “Increased inflation is one reason why yields may increase and if yields go from 2pc to above 2.5pc this should result in about another 3.5pc increase in annuities and at these levels they will be much better value,” he said. For a £100,000 savings pot this means rates will rise from around £4,400 a year level annuity to around £5,000. Mr Burrows said if you do not need an income immediately it could be worth holding off and benefiting from higher rates. But trying to guess future annuity rates presents the same problem as attempting to time investment markets, it is a foolhardy task.'