What is an annuity rate?
An annuity rate is the conversion rate used to turn a pension pot into a regular income.
For example, if a £100,000 pension fund generates £7,000 of annual income, the equivalent annuity rate is 7%.
Generally, higher annuity rates result in higher retirement income.
How do pension annuity rates work?
When calculating annuity rates and providing quotes, providers assess a range of factors.
What affects annuity rates?
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Your age
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Your health and lifestyle
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The size of your pension pot
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Current interest rates
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Government bond (gilt) yields
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The type of annuity selected
The provider then determines the level of guaranteed income it can provide for the remainder of your life, or for the chosen policy term.
Current UK annuity rates (Date 2026)
The below tables show the best rates currently available on the market for a single life and joint life annuity, by age.
Age | Annual Income | Provider |
|---|---|---|
55 | £XXX | TBC |
60 | £XXX | TBC |
65 | £XXX | TBC |
70 | £XXX | TBC |
75 | £XXX | TBC |
Age | Annual Income | Provider |
|---|---|---|
55 | £XXX | TBC |
60 | £XXX | TBC |
65 | £XXX | TBC |
70 | £XXX | TBC |
75 | £XXX | TBC |
Our annuity rates tracker benchmark:
Our annuity rates are generated using our online annuity quote tool and Iress to compare rates available from whole of market providers.
Rates are based on a £100,000 fund, average UK postcode, healthy applicant, and level lifetime income.
Joint rates assume the same average details for the spouse as first applicant.
Rates are updated weekly.
As of [date], the best annuity rate for a single-life annuity is X%, and for a joint-life annuity it is X%.
Joint-life annuities continue paying income to a surviving spouse or partner after the first person dies. These rates often offer lower initial income than single-life annuities. This is because payments are expected to last longer.
Finding the best annuity rates
The best annuity rates are not always the highest rates advertised. The right product depends on what you need.
To maximise retirement income, use Annuity Ready to:
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Compare multiple providers
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Fully disclose medical conditions
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Consider policy features carefully
Even modest differences between providers can increase lifetime retirement income significantly.
Who offers annuities in the UK?
Major annuity providers include:
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Aviva
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Canada Life
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Legal & General
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Scottish Widows
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Standard Life
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Just Group
Different providers may be more competitive for different circumstances. That's because providers use different pricing assumptions, underwriting standards and investment strategies. A company offering the best annuity rate for a healthy 65-year-old may not provide the best quote for someone with a medical condition or a larger pension fund. This is why comparing quotations is so important.
A typical annuity rate changes based on the provider and personal situations. On average, healthy retirees at the age of 60 can get a rate around between X% as of [date]. This depends on product features and market conditions.
Annuity rates can change quickly. Providers often reprice their products, so rates today might be different in just a few weeks.
Someone aged 55 would typically receive the lowest income level as it’s the youngest age you can buy an annuity (increasing to 57 from April 2027). At 70+ you would typically receive the highest income level. This is because providers expect to make payments for fewer years as the purchaser's age increases.
Average annuity rates
Are annuity rates good at the moment?
It is generally thought that current pension annuity rates are appealing. This is especially true when compared to rates from 2015 to 2021. Rising bond yields have let providers offer much higher guaranteed income. This is a big change from the long period of very low interest rates.
How have annuity rates changed over time?
Over the past two decades, annuity rates have generally followed three distinct phases:
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Relatively higher rates before the financial crisis.
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A prolonged decline as interest rates and gilt yields fell.
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A recovery beginning in 2022 as bond yields increased.
Are annuity rates going up?
Annuity rates have generally increased since 2022. Forecasting UK annuity rates is tough. They depend on financial markets.
It is generally thought that future annuity rates will follow government bond yields and interest rate trends.
Rates could increase if:
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Gilt yields continue rising
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Interest rates remain elevated
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Bond market returns strengthen
However, rates could also fall if economic conditions change or bond yields decline.
For this reason, retirees should be cautious about attempting to time the market.
Next steps to get Annuity Ready
Getting a quote with Annuity Ready helps you to:
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Access multiple providers
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Identify enhanced annuity opportunities
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Compare rates and features
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Simplify the application process
If you're unsure about whether an annuity is right for you, you can get free government advice from Pension Wise.
Annuity rate FAQs
Your age, health, and market conditions affect the rate you’re given, but a £100,000 pension might give you about £6,500 to £8,000 or even more each year. Get a personalised quote from us to compare the market and get the best rate for your circumstances.
Pension annuity rates focus on turning pension savings into retirement income. Other annuities can be bought with non-pension funds.
Not necessarily. Using Annuity Ready allows you to compare providers and potentially secure a higher annuity rate and level of guaranteed income.
Waiting might result in a better rate if market conditions improve. However, annuity rates can also fall, and delaying means forgoing income that could be received immediately. The decision should be based on your retirement objectives, finances and attitude to risk.
A good annuity rate is one that looks better than other offers for someone in the same situation. Comparing multiple quotes remains the most effective way to determine whether a rate is attractive.
Waiting might boost your yearly income since annuity rates usually rise as you get older. But delaying means losing years of pension income that you could have received. The right decision depends on your health, financial needs and retirement plans.
A guaranteed annuity rate is a valuable feature found in some older pension contracts. A GAR guarantees a minimum annuity conversion rate regardless of prevailing market conditions. Some older GARs can offer much better rates than today’s market. This makes them very valuable for retirement benefits.
Many GAR holders are better off exercising the guarantee, but every case is different. Before you decide, compare the guaranteed rate to the current market annuity rates.
Enhanced annuities give more income to those with certain health issues or lifestyle risks.
You may qualify if you have:
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Diabetes
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Heart disease
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High blood pressure
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Cancer history
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A smoking history
Enhanced rates can substantially increase retirement income compared with standard annuities.
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Index-linked or inflation-linked annuities increase income over time. Starting income might be less than a level annuity. However, inflation protection helps keep your purchasing power during a long retirement.
Quotations are provided by Annuity Ready on a non-advised basis. This means no advice is given or implied. You are solely responsible for deciding whether the policy is suitable for your needs.
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