Annuity rates for 65-year-olds reach 7.72%, highest in 10 years – Standard Life

Annuity rates have risen to 7.72% for a healthy 65-year-old, the highest level in a decade, according to the latest Standard Life Annuity Rates Tracker. 

Rates have climbed 64% since hitting a low of 4.71% in July 2020. 

This time last year, the average rate was 7.00%. 

That means a 65-year-old with a £100,000 pension pot could now get £7,720 a year from an annuity.

For 60-year-olds, the average rate in May 2025 was 7.01%, compared to 6.32% a year before. 

At age 70, the rate stood at 8.54%, up from 7.82% last year. 

That’s an annual difference of £1,530 between a 60-year-old and a 70-year-old annuitant on a £100,000 pot.

Pete Cowell, head of annuities at Standard Life, part of Phoenix Group, said: “Our latest Annuity Rates Tracker shows annuity rates surged to their highest levels in years, offering retirees one of the strongest opportunities yet for securing a guaranteed income in retirement. 

“This uplift has been driven by higher long-term interest rates. 

“While the recent upward trend has been steady, it feels unlikely annuity rates will fall back to historic lows.”

Cowell added: “Interest in annuities is likely to remain strong, particularly given the anticipated changes to IHT in 2027, which may prompt more people to consider annuities as part of their retirement planning.”

The tracker showed that a healthy 65-year-old man buying an annuity in May 2025 could expect a total lifetime income of £155,180, up from £140,800 last year. 

For a woman, the figure was £172,940, up from £156,210. 

At age 70, a man could expect £136,680 and a woman £153,770.

Cowell added: “For those who want to lock in an income for retirement and ensure essential needs are covered, but still want an element of flexibility, it is helpful to remember that annuities can be used alongside other decumulation strategies. 

“One way is by keeping some savings in drawdown or by staggering the purchase of annuities to benefit from higher rates as you age. 

“This offers the best of both worlds: the certainty and security of a guaranteed income, with the flexibility to respond to changing needs throughout retirement.”