Maike Currie, vice president of personal finance at PensionBee, said: “Political instability matters because uncertainty can quickly filter through to pensions, mortgages and household finances. The 2022 mini-Budget demonstrated how fast turmoil in gilt markets can spill into retirement savings and pension stability.
“Many defined contribution pension funds increase exposure to bonds and gilts as savers approach retirement, leaving pension values sensitive to inflation expectations, interest rates and market confidence.
“Bond markets might seem distant from everyday life, but their impact is immediate and far-reaching. Gilt yields have been climbing on the back of rising oil prices and concerns over government credibility, with 30-year gilt yields recently reaching their highest level in almost three decades.
“Higher gilt yields feed directly into mortgage pricing and borrowing costs. For the estimated 1.8 million households due to remortgage this year, renewed volatility risks keeping mortgage rates higher for longer.
“One silver lining is that higher gilt yields improve annuity rates, allowing those converting pension savings into guaranteed income to secure stronger retirement incomes than they could just a few years ago.”
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