Record numbers shop around for best annuity rates as open market purchases hit 62% – Just Group

More people are shopping around for the best rates on Guaranteed Income for Life (GIfL) solutions, also known as annuities, according to analysis by Just Group. 

In 2024/25, 62% of annuities were bought on the open market, up from 59% last year and 53% in 2022/23. 

Just 38% of annuities were bought from existing providers, down from 41% the previous year and 58% in 2021/22. 

Among those with pensions over £50,000, 68% switched providers.

Staying with an existing provider means customers could miss out on better rates elsewhere. 

The difference between the highest and lowest paying annuity for a healthy 65-year-old with a £50,000 pension is about £362 a year, or £9,050 over a 25-year retirement. 

Nearly half of buyers received enhanced rates after sharing health and lifestyle details.

Stephen Lowe, group communications director at Just Group, said: “It is great to see that more customers are shopping around themselves or using advisers and brokers to compare rates. 

“We estimate that about three-quarters of pension money used to buy annuities is going through the open market, which is the only way people can ensure they are finding the most competitive rates on offer. 

“The statistics hint that the rules introduced in 2019, which obliged pension providers to show existing customers how their own Guaranteed Income for Life quote compared with the best available on the open market, are bearing fruit.”

Lowe added: “The initiative was designed to help customers spot easily how much they might gain from shopping around and encourage people to switch provider to get the best deal. 

“It’s brilliant to see shopping around become the norm because it means more money in people’s pockets every year for the rest of their lives.”

Lowe said people using pension savings to buy an annuity should check rates across the market, use the government’s Pension Wise service, and consider independent advice to get the best deal. 

He also advised asking providers if their quote takes into account medical and lifestyle information, which can boost retirement income.