Retirees with a £100,000 pension pot can now secure a higher guaranteed income than they could just a year ago, according to new figures from Standard Life.
Data from the firm’s Annuity Rates Tracker shows that annuity rates rose by 5.48 per cent during 2025.
Annuity rates rose further towards the end of 2025, reaching 7.51 per cent for a healthy 65-year-old.
This represents a 5.48 per cent increase compared with the December 2024 rate of 7.12 per cent, according to the Standard Life Annuity Rates Tracker.
For someone retiring with a £100,000 pension pot, this rise means they could now secure an income of up to £7,510 a year, compared with £7,120 a year earlier.
While the annual increase may appear modest, over the course of retirement it adds up to a meaningful boost, delivering an estimated extra £7,000 to £9,000 in total lifetime income.
While the yearly increase may appear small, over the course of retirement it makes a meaningful difference, adding between £7,000 and £9,000 in extra total income across a retiree’s lifetime.
Pete Cowell, Head of Annuities at Standard Life, said: "Annuity rates have been trending upwards over the past couple of years, giving retirees a welcome boost.
For someone retiring with a £100,000 pension pot, this rise means they could now secure an income of up to £7,510 a year
| GETTY"These latest figures show that the rates people can secure today are meaningfully higher than a year ago, offering something we know many retirees value: income certainty and the reassurance that their income will last for the rest of their lives."
He added that annuities offer stability and long-term certainty during periods when market volatility can prove unsettling, helping people approach retirement with greater confidence.
The tracker data reveals substantial differences in expected lifetime income based on gender, reflecting variations in average life expectancy.
A man aged 65 purchasing an annuity at the current 7.51 per cent rate could anticipate total income of approximately £150,000
| GETTYA man aged 65 purchasing an annuity at the current 7.51 per cent rate could anticipate total income of approximately £150,000, while a woman of the same age might expect around £168,000.
Those willing to wait until 70 can access even better rates, with healthy individuals at that age securing 8.25 per cent.
This generates anticipated lifetime incomes of £130,000 for men and £148,000 for women.
Those willing to wait until 70 can access even better rates
| GETTYWhile purchasing an annuity earlier typically results in greater overall lifetime income, the rates themselves climb as people age.
A 60-year-old in good health could obtain 6.74 per cent in December 2025, whereas someone a decade older would receive 8.25 per cent – meaning a 70-year-old with £100,000 would receive approximately £8,250 annually compared to £6,740 for the younger retiree.
Mr Cowell noted that many people are now considering combining annuities with drawdown options, creating a balance between guaranteed income for essential expenses and flexibility for other spending.
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