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Annuity rates rates remain stable in the first six months of 2024

Annuity rates rates remain stable in the first six months of 2024

Written by Retirement Line

There is good news for people choosing an annuity for some or all of their pension income. Retirement Line’s analysis for the first six months of 2024 shows rate stability, with a small increase from January to June.

Based on data from our in-house annuity quote system, which obtains quotes from the UK’s leading open market annuity providers, rates increased by as much as 5% in the period January-June 2024. This would potentially mean thousands of pounds of extra income across an individual’s retirement.

Annuity rates and income for January 2024 to June 2024

This table¹ below shows the best annuity rate available for five different product scenarios, based on a healthy 65-year-old married male buying a £100,000 annuity:

Annuity type

January 2024

February 2024

March 2024

April 2024

May 2024

June 2024

Single life, level







Single life, escalating at 3%







Single life, escalating at RPI







Joint life 50%







Joint life 100%








The percentage six-month annuity rate increase for each of these five scenarios are:

Annuity type

Annuity rate increase,  Jan-June 2024

Single life, level


Single life, escalating at 3%


Single life, escalating at RPI


Joint life 50%


Joint life 100%



As can be seen, there are differences between the rate increases for the different product scenarios. However, our data confirms that there have been increases in annuity rates across product options. 

The table¹ below shows the annual income achievable from these annuity rates:

Annuity type

January 2024

February 2024

March 2024

April 2024

May 2024

June 2024

Single life, level







Single life, escalating at 3%







Single life, escalating at RPI







Joint life 50%







Joint life 100%








Let’s look at the first example in the above table, of a healthy 65-year-old married male with a £100,000 pension pot buying a lifetime annuity. When buying the same annuity in early June, they would have enjoyed additional annual income of £365.76 compared to six months ago. Based on average life expectancy of a further 18.3 years, that’s £6,693.40 of additional lifetime income.

Rate and income increases differ for other customer and product scenarios, but the general trend has been for modest rate increases across the board.

What has influenced the six-month annuity rate trend?

Mark Ormston, Retirement Line’s Director of Propositions, says: “The slight increase in average annuity rates over the past six months, in part, stems from improvements in the UK mid-term gilt market.

“At the end of 2023 and the beginning of 2024, UK gilts fell slightly with many anticipating the Bank of England’s Monetary Policy Committee (MPC) to cut the base rate in the first quarter of 2024. 

“With no base rate cuts so far this year, and the next MPC meeting taking place during the election period, we may not see any cuts until the end of Q3. Naturally, nobody knows for certain when the MPC may vote to cut the base rate and there are multiple factors which make up annuity rates.”

Where will annuity rates go next?

The view of many analysts is that a cut to the Bank of England’s Bank Rate (interest rate) any time soon is less likely than previously anticipated, due to the upcoming general election. 

In the first few weeks of May, predictions of a June rate cut emerged. But since the Prime Minister’s 22 May announcement of a July general election, noise about rate cuts has largely disappeared. 

It is practically impossible to accurately predict what will happen next with annuity rates. They are influenced by a number of economic factors, including current and possible future interest rates and gilt rates. 

Mark Ormston says: “For anyone considering an annuity purchase, playing a guessing game about when annuity rates might peak can be a dangerous one. People should weigh up all kinds of factors about when to buy an annuity. When it comes to securing the best annuity rate, people should ensure they have disclosed accurate health and lifestyle information and have shopped around on the open market.”

Something else to remember of course is that interest rates aren’t the only things that affect annuity rates. Commercial decisions also come into play, making the prospect of accurate annuity rate predictions even less likely. 

What affects an individual’s personalised annuity rates?

For simplicity, we base our annuity rate tables on a healthy 65-year-old married male. However, annuity rates are always personalised to each individual buying an annuity. 

As well as underlying interest rates and other economic factors, a number of personal circumstances can change the actual rate and income that an individual is offered by annuity providers, including:

Age. The older you are, the higher the annuity rate and income you can expect.

Location. People living in a postcode area with lower-than-average life expectancy may be offered a higher rate.

Health and lifestyle. You may qualify for a better annuity rate and more income on account of a current or past medical condition, or certain lifestyle choices such as smoking or drinking alcohol. That’s because lifetime annuity providers offer enhanced annuities with higher annuity rates that pay out more income to people who the provider expects will have a lower life expectancy on account of their health and lifestyle. 

Product choice. Some annuity product options influence the annuity rate and income you are offered. For example, an increasing annuity will pay out less income initially, but the payments will increase each year. Also, adding death benefits to your annuity, such as choosing a joint life annuity, will reduce the annuity rate you are offered. This is in return for paying your beneficiary should you pass away before them.

Shopping around. You don’t have to accept the annuity rates offered to you by your pension scheme provider. You have the right to shop around to see if another provider offers a more competitive rate. Retirement Line shops around the UK’s leading annuity providers on your behalf as part of our comprehensive annuity service.  

Talk to Retirement Line about your annuity options 

If you are considering an annuity for retirement income, our friendly specialists are here to help. They will explain your options and explore how much guaranteed income you could achieve from your pension fund.

You can speak to our team today by calling freephone 0800 652 1316 or request a call back. Alternatively, use our free online tools for an instant estimate of how much annuity income you might expect to achieve.

¹ Data in tables based on historic annuity rates from UK providers, generated by Retirement Line’s in-house annuity quote system typically at or near the first day of each month. 

Figures in these tables are based on conventional lifetime annuities, using a Peterborough postcode (PE7 8JG), with the payment frequency set to monthly in arrears. They are based on a married male aged 65 when the annuity is set up. More income may be eligible for people who qualify for an enhanced annuity on account of health or lifestyle factors. 

‘Single life, level’ is a plan where payments remain level for the duration of the annuity.

‘Single life, escalating at 3%’ is where payments start at a lower level than a level plan, but increase at 3% each year.

‘Single life, escalating at RPI’ is where payments start at a lower level than a level plan, but increase each year in line with the Retail Price Index.

‘Joint life 50%’ is a joint life annuity paid on a level basis where, on death of the first life, the beneficiary would continue to receive 50% of the annuity payments for the rest of their life.

‘Joint life 100%’ is a joint life annuity paid on a level basis where, on death of the first life, the beneficiary would continue to receive 100% of the annuity payments for the rest of their life.

For both joint life examples, figures shown are based on the first life being male, and the beneficiary being a female of the same age.

Please see our annuity rates page for regular updates on the latest annuity rates.

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