What could a £100,000 pension pot really give one in retirement? For many savers, the answer is less straightforward than they might hope, with new research showing people have very different ideas about how to make their money last.
While some want the certainty of a guaranteed income, others are focused on growth, flexibility, or protection against inflation, underlining the tough choices facing anyone approaching retirement.
Current market conditions have created favourable circumstances for those seeking retirement income solutions.
According to Hargreaves Lansdown's annuity comparison service, individuals aged 65 with a £100,000 pension fund can secure annual payments reaching £7,793 through a single life level annuity with five-year protection.
These figures represent near-record levels for annuity income.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, noted: "This is close to all-time highs and means that annuities are being used by a wider range of people."
Rising rates have made annuities popular again, especially with people who want a steady, guaranteed income they can plan around.
In the first half of 2025, the average pension fund used to buy an annuity was £162,729, a sharp jump from £62,301 in the same period back in 2021.
This shift overturns the old idea that annuities are only for people with smaller pensions. Increasingly, they are being chosen by those with much larger retirement pots as well.
Average annuity rates have risen five per cent over the past year | GETTYHelen Morrissey observed: "This busts the myth that annuities only appeal to those with smaller pensions as those with more put aside make use of annuities as part of their retirement strategies."
The figures indicate that wealthier retirees are now more likely to see annuities as a key part of their overall retirement planning.
Nearly two in five people said having a reliable income was their top priority in later life.
The survey also showed a wide mix of goals. While 39 per cent put guaranteed income first, one in ten said protecting their savings against inflation mattered most.
The same proportion, one in ten, said they wanted their pension to keep growing through investments
| GETTYThe same proportion, one in ten, said they wanted their pension to keep growing through investments.
Around seven per cent valued the flexibility to take out more money when needed, while six per cent focused on paying as little tax as possible.
Together, these findings show just how differently people think about life after work, with priorities shaped by their attitudes to risk and the lifestyles they hope to maintain.
The retirement landscape demands careful consideration of multiple factors before committing to any single approach.
This hybrid approach combines guaranteed income security with investment flexibility
| GETTYMorrissey emphasised the permanence of annuity decisions: "Once bought an annuity cannot be unwound so you need to make sure you use an annuity comparison service to see what the different providers have to offer."
She highlighted crucial considerations including inflation protection and spousal provisions, noting that whilst level annuities offer higher initial payments, they lack annual increases found in inflation-linked products.
For those seeking balance, Morrissey suggested: "We could see increasing numbers of people using a balance of both options, and annuitising in stages, in a bid to meet these priorities."
This hybrid approach combines guaranteed income security with investment flexibility.