Annuity rates remain high in January 2026

05 January 2026

UK annuity rates continue to hold at near-record levels, according to our latest search of deals available from providers. The best rate available on 1 January was 7.69% for a healthy 65-year-old.

The good news for people looking to buy an annuity with their pension savings is that rates are holding close to the near-record levels we saw through much of 2025. As an example, January’s rate is just 0.23% down from July’s rate of  7.92%.  

Looking at a year-on-year comparison, this month’s rate is up .33 percentage points on last January’s rate of 7.36%.

Retirement Line’s Mark Ormston, Director of Propositions and Corporate Partnerships, says that news of rates remaining solid may come as a surprise given market conditions:

“On more than one occasion over the past year we’ve seen predictions of a noticeable drop in annuity rates. But pension savers will be pleased to hear that so far, reports of the rate’s imminent demise have not come to fruition.

“I am yet to see any sustained downward trend in mid-term gilt yields, which annuity providers typically price into their annuity rates. Also, cuts to the Bank of England’s Base Rate does not appear to have had a major effect on annuities.

“As we always say, nobody has a reliable crystal ball when it comes to annuity rates. However, pension savers can take comfort from the fact that annuities continue to provide significantly more income than was the case just a couple of years ago.”

How do annuity rates affect income?

Retirement Line bases these searches across annuity providers on a healthy 65-year-old male with a Peterborough postcode. The rate of 7.69% means that a pension pot of £100,000 would deliver guaranteed annual income of £7,688.28. The income level would be higher for someone older than 65, and lower for someone younger. 

Other factors will affect the rate and income. For example, this rate assumes level income, although you can instead set up an income that starts lower but increases at a fixed rate or with a link to inflation. 

This rate also assumes no provision for payment after the annuity holder’s death. However, you can ensure that a beneficiary receives money from your annuity after you die, either as a lump sum or regular income. This would typically reduce the size of the payments you receive during your lifetime.

More income may be possible on account of adverse health or lifestyle factors through an enhanced lifetime annuity. Pension savers also have the option of taking out a fixed-term annuity, with the option of a guaranteed maturity amount based on today’s rates. 

How to find your best available annuity rate

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, based on the very latest rates.

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.