Best annuity rates
Annuity rates help determine the guaranteed income a provider pays in exchange for your pension savings.
For those looking for a guaranteed income for life, knowing pension annuity rates is key to their decision. Even small rate differences can impact retirement income.
What is an annuity rate?
An annuity rate is the percentage used to turn pension savings into an annuity income.
For example, if a £100,000 pension fund generates £7,000 of annual income before tax, the equivalent annuity rate is 7%.
Generally, higher annuity rates result in higher retirement income.
How do pension annuity rates work?
Annuity rates work by considering a range of factors to help providers calculate the annuity income they can offer you per year.
What affects annuity rates?
- Your Age
- Your health and lifestyle
- The amount of pension savings
- Current interest rates
- Government bond (gilt) yields
- 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 a fixed term annuity, the chosen policy term.
Current UK annuity rates (2026)
The below tables show the best rates currently available on the market for a single life and joint life annuity, by age.
Our annuity rates are generated using our online annuity quote tool and Iress to compare rates available from providers across the whole of the open market.
Rates are based on a £100,000 fund, average life-expectancy UK postcode, healthy applicant, and level lifetime income.
Joint rates assume the same average details for the spouse as first applicant at a benefit of 50%, which means it would provide payments at 50% to the surviving spouse.
The term 'best annuity rates' is used to show the most favourable rate available this week from our panel of providers. The rates shown are illustrative and subject to change based on your personal circumstances.
Rates are updated weekly.
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 find the best annuity rate for you, use Annuity Ready to:
Compare multiple providers
Fully disclose medical conditions
Consider policy features carefully
Even modest differences between providers can increase lifetime retirement income significantly.
Find your best rate
Who offers annuities in the UK?
Annuity providers available directly to customers in the UK include:
- Aviva
- Canada Life
- Legal & General
- Scottish Widows
- Standard Life
- Just Group
Different providers may be more competitive for different circumstances. These are the providers that Annuity Ready compares.
Why do annuity quotes differ between providers?
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.
Average annuity rates
Annuity rates can change quickly. Providers often reprice their products, so rates today might be different in just a few weeks.
Excluding any exceptional circumstances (such as protected pension ages or early access to pension benefits), someone aged 55 would typically receive the lowest income level. This is because it's the youngest age you can buy an annuity (increasing to 57 from the 6th of April 2028). 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.
Are annuity rates good at the moment?
Industry experts consider current pension annuity rates to be appealing. 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 phases:
- Higher rates before the 2008 financial crisis.
- A long period of lower rates as interest rates and gilt yields declined.
- A recovery from 2022 onwards as bond and gilt 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.
Future annuity rates will continue to follow government bond yields and interest rate trends.
Rates could increase if:
- Gilt yields continue rising
- Interest rates remain elevated
- 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:
Access multiple providers
Identify enhanced annuity opportunities
Compare rates and features
Simplify the application process
If you're unsure about whether an annuity is right for you, you can get free, impartial guidance from Pension Wise.
Get your personalised rate
FAQ's
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 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, making them very valuable for retirement benefits. Before you decide to exercise your GAR, compare it to the current market annuity rates to make sure you’re getting the best rate for you.
Enhanced annuities give more income to those with certain health issues or lifestyle risks. You may qualify if you have conditions including:
- Diabetes
- Heart disease
- High blood pressure
- Cancer history
- A smoking history
Enhanced rates can substantially increase retirement income compared with standard annuities.
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.