Sixty-four is the average age at which people purchase lifetime annuities, while it’s 63 for fixed-term annuities, according to sales data from Standard Life.

With the current state pension age at 66, the firm said that the data showed how over-50s were recognising the benefits of creating a guaranteed income to help “bridge the income gap” in the years leading up to the state pension age.

Standard Life's 2024 Retirement Voice report found that 48 per cent of retirees have retired by age 60, leaving a six-year window before state pension payments begin, which will widen when the state pension starts to rise to 67 next year.

With nine in 10 (91 per cent) over-50s stating that they valued income security and certainty in retirement, annuities are seen as key for those seeking a guaranteed income during their transition from full-time work to retirement, bridging the gap before state pension payments begin, the firm added.

Indeed, almost half (46 per cent) of those over 50 planning to purchase a fixed-term annuity said they would do so at retirement to help bridge the income gap.

This recognition was reflected in figures from the Association of British Insurers (ABI), which showed that sales of pension annuity contracts increased by 24 per cent in 2024 to 89,600, reaching a new ten-year high.

“While the decision around if, how and when you choose to retire is unique to each person, the fact that over-50s are choosing to purchase annuities well ahead of the state pension age is telling, said Standard Life head of annuities, Pete Cowell.

With their ability to provide a guaranteed income, either for life or for a fixed term, there is increasing recognition that they play a valuable role in covering costs in the early part of retirement and beyond,” he continued.

He urged shoppers to consider the different types of annuity products and options available, and other ways they can be used as part of a wider mix of retirement income solutions.

"Lifetime annuities can provide a guaranteed income for life, while a fixed-term annuity ensures a guaranteed income for a set period, which can be particularly helpful for people navigating a phased or full retirement before state pension age," he explained.

"For those considering the financial well-being of their loved ones, a joint life annuity can also provide an income that ensures, even after one partner passes away, the surviving spouse continues to receive financial support,” Cowell added.

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