Nearly four in 10 (39 per cent) people said guaranteed income is their top retirement priority, research from Hargreaves Lansdown has revealed, as annuities become an “increasingly important” tool.

Hargreaves Lansdown head of retirement analysis, Helen Morrissey, said it is "understandable" that a guaranteed income is a top priority for people entering retirement, given concerns around lifespan and the need to plan their lifestyle with some degree of certainty.

She noted that some people can rely on defined benefit (DB) pensions, but as these types of pensions are “rapidly disappearing”, there has been an increase in the importance of annuities.

“Annuities are seeing a resurgence in popularity alongside rising incomes,” she said, noting that Hargreaves Lansdown research shows a 65-year-old with a £100,000 pension could receive up to £7,793 per year from a single-life, level annuity with a five-year guarantee.

Morrissey said this figure is close to “all-time highs”, suggesting that annuities are being adopted by a broader demographic.

She highlighted previous data showing that in the first six months of 2025, the average fund used to purchase an annuity was £162,729, up from £62,301 in the same period in 2021, an increase of more than 160 per cent.

“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,” she stated.

However, Morrissey stressed the importance of understanding the irreversible nature of annuity purchases and that choosing the right product is crucial.

In particular, Morrissey pointed out that factors such as marital status and inflation protection.

“A level annuity may give the highest starting income, but it won’t rise every year like an inflation-linked product. A single life annuity will also not make provision for a spouse or civil partner when you die,” she said.

The survey highlighted other priorities beyond guaranteed income, with 10 per cent of respondents suggesting that having an income that rises with inflation was a key priority.

Morrissey explained that over a potentially long retirement, inflation can erode real purchasing power, making protection strategies critical.

She said that this can be achieved through inflation-linked annuities or by maintaining exposure to growth assets via income drawdown, which also addresses the 10 per cent of respondents who said the opportunity for their income to grow over time was key.

Another priority highlighted by the survey was flexibility, with 7 per cent wanting the ability to take more income as needed.

Morrissey noted that income drawdown can provide this flexibility but cautioned that withdrawals must be managed carefully to ensure long-term sustainability.

Other priorities identified in the survey include tax efficiency, with 6 per cent of respondents seeking to minimise the tax paid on their retirement income.

The survey highlighted a broad range of priorities, including guaranteed income, flexibility, and growth potential.

While some retirees will rely solely on annuities or income drawdown, Morrissey suggested that an “increasing” number may adopt a blended approach, annuitising in stages to balance these objectives.

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