Annuity rates break through the 8% barrier

11 May 2026

Written by Retirement Line

The best annuity rate is now 8% for the first time in decades. It’s more good news for anyone aged 55+ looking to turn some or all of their pension savings into guaranteed income.

Pensions experts traditionally use the example of a healthy 65-year-old buying a lifetime annuity with £100,000 of pension savings as the benchmark for annuity rate analysis. The rate directly relates to the level of income someone can achieve when buying an annuity with pension savings. 

On Monday 11 May 2026, the best annuity rate for this example was just over 8%. It meant that £100k would buy a guaranteed income for life of £8,051.

The same client choosing a lifetime annuity where income starts lower but escalates at 3% each year would begin with an annual income of £6,012.

These are results from Retirement Line’s in-house annuity quote system, which obtains quotes in real time from all of the UK’s leading annuity providers, including Aviva, Standard Life, Just and Scottish Widows.

Even higher rates will typically be available to people older than 65. Also, most people will be eligible for more income from a medically enhanced annuity on account of health conditions or lifestyle choices.

Pension savers also have the option of buying a fixed term annuity. These run for a term of your choosing and typically pay a higher regular income during the term than would be the case with a lifetime annuity.

Rates on the rise

News that rates have broken through the 8% barrier is the latest milestone in several years of rate rises. Retirement Line’s Chief Compliance Officer, Mark Ormston, says:

“Rates have been tipping close to 8% for some time. Looking at our record of rates on or near the first of each month, for example, we saw a best rate of 7.92% in July 2025. 

“These rates are in stark contrast to where they were a few years ago. At the start of 2022, for example, Canada Life reported average rates at 4.5%. It’s therefore clear that annuities represent great value for pension savers looking to set up their retirement income. Of course, they should also consider other factors when deciding if an annuity is the right pension income product for them.

“Annuity rates fluctuate constantly, largely as annuity providers respond to changes in medium to long term gilt rates, since they typically buy gilts to fund their clients’ annuities. Factors like the ongoing situation in the Middle East and political uncertainty at home are certainly having an effect on gilt rates, and therefore annuity rates.

“Pension savers don’t have a crystal ball and can only really decide whether an annuity is right for them, and when to buy one, based on the rate they are offered today. At Retirement Line, we can help by providing quotes for the best rates from all the leading  annuity providers.”