A £100,000 pension pot

‘I’m 65 years old with a £100,000 pension pot – how much can I get in retirement?’
Story by Temie Laleye

A £100,000 pension pot could now secure a significantly higher income in retirement, with recent market shifts driving up annuity rates.

Experts have explained how much a 65-year-old could expect to receive annually and why shopping around for the best deal has never been more important.

A 65-year-old with a £100,000 pension can now get up to £7,882 per year.

Retirees can get this guaranteed income for life through a single life level annuity with a five-year guarantee, according to latest data from Hargreaves Lansdown’s annuity search engine. This is up 63 per cent on what was available five years ago.

Couple at laptop© GB News

Helen Morrissey, head of retirement analysis Hargreaves Lansdown said: “Annuity incomes have been a ray of sunshine for retirees in these turbulent times.

“These increases are welcome news for anyone in the market for a guaranteed income in retirement and have contributed to a real revival in a market that was once considered on the edge of extinction.

“2024 was a bumper year for the annuity market and current rates will continue to fuel interest.”

Pension folder© GB News

Using an annuity search engine is crucial for retirees to understand what the market can offer before making their final decision.

This revival in annuity values has driven increased market interest, with Financial Conduct Authority retirement income market data showing sales up 38.7 per cent in 2023/24.

Morrissey has warned that while annuity incomes are currently strong, they may begin to dip if the Bank of England starts cutting interest rates — as widely expected in May.

Pensioners look at statements© GB News

However, she urged savers not to panic. Rates aren’t expected to drop as sharply as they rose, and a return to the ultra-low levels seen in previous years is unlikely.

Morrissey noted that retirees don’t need to annuitise their full pension all at once.

Buying annuities in stages can provide greater flexibility and allow income to rise over time — particularly for those who may qualify for enhanced annuities due to age or health conditions.

She said: “You can secure guaranteed income as your needs change. And if you develop a qualifying condition, you’ll get a further bump in income.”

Fancy a gamble with your retirement ?

This is up 63 per cent on what was available five years ago.

Plus you have to surrender all your hard earned. GL with that.