Annuity rates are at their highest level in 16 years, according to recent data from Canada Life, although many consumers remain reluctant to switch providers or shop around for the best deal.

Independent research conducted by Canada Life found that one in eight (12 per cent) prospective annuity customers would not consider switching from their existing pension provider to another supplier, even if they could gain additional retirement income.

The research also showed that most UK adults aged 55 or over planning to buy an annuity directly from their current pension provider would only consider switching if offered at least £400 in additional annual income.

This was despite annuity rates setting new highs in 2025, with returns available to pension savers through guaranteed income for life solutions climbing to the highest level since 2009.

These findings were supported by an analysis of the Financial Conduct Authority (FCA) financial lives survey from Just Group, which highlighted that one in three annuities were bought by 'zombie buyers' who failed to shop around and likely missed out on hundreds of pounds a year.

It revealed that 33 per cent of adults aged 50 plus who bought an annuity in the last four years said they had not compared the products and prices of two or more providers before purchasing their guaranteed income for life.

Indeed, more than one-third (35 per cent) of the same group said they had purchased from the same provider they used to save with, while 12 per cent were unsure if they had done so.

Canada Life retirement income director, Nick Flynn, said that we are currently in a "buyer's market" with annuity rates at their highest since 2009, making it an "ideal time" for prospective retirees to consider their options and potentially secure greater value from their pension savings.

"It's essential to shop around before purchasing an annuity – whether through independent research, a financial adviser or an annuity broker – to ensure you're getting the best available rate," he continued.

Just Group communications director, Stephen Lowe, added that while higher rates on guaranteed income for life products had increased customer interest, there were still too many "zombie buyers" who were not shopping around to get the best annuity deals.

"Over the course of an entire retirement, a saver failing to shop around could be missing out on thousands of pounds of extra income – the closest thing in the financial world to being given free money," he warned.

Both firms also noted the importance of disclosing health and lifestyle factors when applying for an annuity, which can enhance an individual's guaranteed income, regardless of age.

For example, Canada Life case studies showed that people who disclosed relatively common health conditions such as high BMI, high cholesterol or high blood pressure could benefit from hundreds of pounds of additional annual income.

However, according to the FCA, three-quarters (74 per cent) of adults aged 50-69 who planned to access their defined contribution (DC) pension in the next two years "did not know" that certain health conditions could increase their annuity income.

"Anyone considering purchasing an annuity should shop around the open market and disclose information on health and lifestyle factors to ensure they get a personalised rate – all of which will help them secure the best rate on offer to them," Lowe concluded.

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