Research reveals an ongoing annuity knowledge gap

05 June 2025

New research from Standard Life reveals that common misconceptions about annuities remain, although there are signs of improvement in consumer awareness.

Some of the key findings from the research, which involved 2,000 people aged over 50, are that:

• Almost half (48%) are unfamiliar with what lifetime annuities are and how they compare to other annuity products.

• Less than a third (30%) know they can extend an annuity to cover the life of a surviving partner.

• Less than a third (30%) know that an annuity can be purchased while still keeping some pension savings in income drawdown.

• Less than a fifth (18%) knew that enhanced annuities can often provide a more generous income to those suffering from health conditions or shorter life expectancy. 

On a more positive note, the research suggests that annuity awareness might be improving. For example, when asked which retirement income products provide a guaranteed income for life, almost half (49%) correctly identified lifetime annuities. That compares to just 39% from a 2023 survey.

However, the potentially important role of annuities – which ensure guaranteed income unaffected by investment performance or interest rates – in retirement income was confirmed by another aspect of the research. Almost everyone surveyed (95%) said that income certainty and security are important to them.

Reaction to the research

Pete Cowell, head of annuities at Standard Life, said: “Common misconceptions still exist around what annuities are and aren’t. The reality is that there are many ways annuities can be used as part of the retirement income toolkit.

“Lifetime annuities, for example, offer the security of an income for life, while fixed term annuities provide certainty for a set period, allowing retirees to reassess their options later. 

“It’s important to understand the different annuity products available and the ways they can be used, which will ultimately help ensure people opt for the solutions that best meet their specific retirement needs.”

Can we help you with your retirement income decision?

Retirement Line offers you several useful resources to help you better understand your retirement income options, especially the way that annuities work. Visit our retirement blog to find dozens of useful articles, and elsewhere on our website you’ll find extensive information on both annuities and income drawdown. 

There are also free online tools for an estimate of how much annuity income you might expect to achieve from your pension pot.

We also offer a no-obligation annuity quotes and information service. In this telephone-based service, our Annuity Guidance Team compares the best annuity quotes available to you from the UK’s leading annuity providers. 

You can speak to our team today by calling freephone 0800 652 1316 or request a call back.

Members of our Annuity Guidance team are happy to talk to you as often as you like, and provide you with as many quotes as you wish in order to compare your annuity options. Only if we arrange an annuity for you will we be paid a commission from the provider, which is taken into account when calculating their annuity rate.