Story by Temie Laleye
Retirees with a £100,000 pension pot can now secure a higher guaranteed income than they could just a year ago, according to new figures from Standard Life.
Data from the firm’s Annuity Rates Tracker shows that annuity rates rose by 5.48 per cent during 2025.
This represents a 5.48 per cent increase compared with the December 2024 rate of 7.12 per cent, according to the Standard Life Annuity Rates Tracker
For someone retiring with a £100,000 pension pot, this rise means they could now secure an income of up to £7,510 a year, compared with £7,120 a year earlier.
While the annual increase may appear modest, over the course of retirement it adds up to a meaningful boost, delivering an estimated extra £7,000 to £9,000 in total lifetime income.
While the yearly increase may appear small, over the course of retirement it makes a meaningful difference, adding between £7,000 and £9,000 in extra total income across a retiree’s lifetime.
Pete Cowell, Head of Annuities at Standard Life, said: “Annuity rates have been trending upwards over the past couple of years, giving retirees a welcome boost.
Pensioner couple and retirement savings | Source: GETTY© GB News
“These latest figures show that the rates people can secure today are meaningfully higher than a year ago, offering something we know many retirees value: income certainty and the reassurance that their income will last for the rest of their lives.”
He added that annuities offer stability and long-term certainty during periods when market volatility can prove unsettling, helping people approach retirement with greater confidence.
Pension folder | Source: GETTY© GB News
A man aged 65 purchasing an annuity at the current 7.51 per cent rate could anticipate total income of approximately £150,000, while a woman of the same age might expect around £168,000.
Those willing to wait until 70 can access even better rates, with healthy individuals at that age securing 8.25 per cent.
This generates anticipated lifetime incomes of £130,000 for men and £148,000 for women.
Couple at laptop | Source: GETTY© GB News
While purchasing an annuity earlier typically results in greater overall lifetime income, the rates themselves climb as people age.
A 60-year-old in good health could obtain 6.74 per cent in December 2025, whereas someone a decade older would receive 8.25 per cent – meaning a 70-year-old with £100,000 would receive approximately £8,250 annually compared to £6,740 for the younger retiree.
Mr Cowell noted that many people are now considering combining annuities with drawdown options, creating a balance between guaranteed income for essential expenses and flexibility for other spending.
In just over 3 years the SNOWBALL expects to earn at least 10k in this calendar year and whilst this isn’t guaranteed, guess what, you get to keep all your hard earned.
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