Annuity rates continued to increase in 2025, rising to 7.51 per cent for a healthy 65-year-old at the end of the year, according to Standard Life’s Annuity Rates Tracker.

This represented a 5.48 per cent year-on-year increase, with annuity rates sitting at 7.12 per cent at the end of December 2024.

Standard Life calculated that someone retiring with a £100,000 pension pot would have secured an income of up to £7,510 a year, up from £7,120 the previous year, due to the uplift.

Over the course of retirement, this would equate to an additional £7,000 - £9,000 in expected total income.

“Annuity rates have been trending upwards over the past couple of years, giving retirees a welcome boost,” said Standard Life head of annuities, Pete Cowell.

“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.

“At a time when market volatility can feel unsettling, annuities provide a level of certainty and long term stability that helps people retire with greater confidence.”

According to the tracker, a healthy 65-year-old man who purchased an annuity in December 2025 at a rate of 7.51 per cent could expect a total lifetime income of £150,000, while a women of the same cohort could expect £168,000.

At age 70, the annuity rate rises to 8.25 per cent, generating expected lifetime incomes of £130,000 for men and £148,000 for women.

“As annuity rates have improved, more people are taking a fresh look at how these products can support their retirement plans, bringing certainty to this next phase of life,” Cowell stated.

“In addition, many may wish to use an annuity with more flexible options, like drawdown. This can create a balance of security and freedom and can be a simple way to make sure some of your essential spending is covered for life, while keeping flexibility for everything else.

“Ultimately, it’s key to review all options when approaching retirement, and remember you can always seek advice or guidance to help make the best choice for your circumstances.”

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