Annuity rates have reached an eighteen-year high of 7.75 per cent according to the Standard Life Annuity Rate Tracker.
Rates for a healthy 65-year-old rose 1.17 per cent between April and July 2026, and a healthy 65-year-old with a £100,000 pension pot could expect to receive up to £7,750 per annum.
The results are for level annuities, which do not have inflation protection.
According to the tracker, a healthy 70-year-old who bought an annuity during the same period could expect a rate of 8.43 per cent. For a man, this would provide a total lifetime income of £135,000 while a woman could expect to receive £155,000.
Pete Cowell, head of annuities at Standard Life, says: “Annuity rates have reached 7.75 per cent, the highest rates since August 2008, underlining just how much the retirement income landscape has shifted in recent years.
“At today’s rates, the time it takes to receive back your initial investment has significantly shortened. The payback period for a £100,000 annuity purchase with a rate of around 5 per cent in 2020 would have taken around 20 years to repay. However, with today’s rates closer to 7.75 per cent, that falls to around 13 years, depending on individual circumstances.”
The tracker, developed by Standard Life, monitors current annuity rates across the market for those annuitising at ages 60, 65, and 70. It also shows the total lifetime income from an annuity and the extent to which annuity rates improve with age.
