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Annuity rates hit 7.75% as retirement incomes reach 18-year high – Standard Life

A healthy 65-year-old with a £100,000 pension pot could expect to receive up to £7,750 a year, up from £7,660 in April 2026.

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Annuity rates hit 7.75% as retirement incomes reach 18-year high – Standard Life
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Annuity rates reached 7.75% in July 2026, their highest level since August 2008, according to Standard Life’s annuity rate tracker. 

Rates for a healthy 65-year-old increased by 1.17% between April and July 2026. 

A healthy 65-year-old with a £100,000 pension pot could expect to receive up to £7,750 a year, up from £7,660 in April 2026. 

This rise could mean an extra £2,060 throughout retirement.

Rates for a healthy 60-year-old were 7.06% in July, up from 6.95% in April, a 1.58% increase. 

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At 70, rates rose to 8.43% from 8.38%, a 0.60% change.

Pete Cowell, head of annuities at Standard Life, said: “Annuity rates have reached 7.75%, 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. 

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“The payback period for a £100,000 annuity purchase with a rate of around 5% in 2020 would have taken around 20 years to repay.”

Cowell added: “However, with today’s rates closer to 7.75%, that falls to around 13 years, depending on individual circumstances.”

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Analysis also showed that a healthy 65-year-old man who bought an annuity in July 2026 at 7.75% could expect total lifetime income of £156,000. 

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For a woman, the expected income was £177,000. 

At 70, a healthy man buying at 8.43% could expect £135,000, while a woman could expect £155,000.

For men, expected income at 60 in July 2026 was £173,000, at 65 was £156,000, and at 70, £135,000. 

Women at 60 could expect £194,000, at 65 was £177,000, and at 70 was £155,000.

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A healthy 60-year-old would get £7,060 a year from a £100,000 pension pot, while a healthy 70-year-old would get £8,430, a difference of £1,370.

Cowell said: “Trying to predict how the market might perform can be difficult and while rates have remained elevated over recent months, planning ahead is key. 

“For many, having some form of guaranteed income in place can provide a critical foundation for covering core living costs, with more flexible options like drawdown used alongside it to help balance certainty with flexibility.”

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