Standard Life report annuity rates jump 8 per cent in the past year

25 March 2025

Standard Life have seen annuity rates rise by 8% over the last year, boosting potential retirement income for thousands of people. 

According to Standard Life, a healthy 65-year-old with a £100,000 pension pot could now lock in an annual income of £7,360. That’s £550 a year more than they would have received in January 2024, when rates had already risen considerably compared to just a couple of years ago.

Over a lifetime, the boost is significant. A 65-year-old man securing an annuity with £100,000 in January 2025 could expect to receive around £147,940 in total payments, while a woman of the same age could see around £164,860. The difference reflects women’s longer life expectancy.

Older retirees are also benefiting. A 70-year-old man buying an annuity with £100,000 could see lifetime payments of around £131,350, while a woman of the same age could receive about £147,770. The older customer would get a higher annuity rate (8.21% compared to 7.36%) but would receive their income for five fewer years, hence receiving less income in the long run. 

For those considering fixed-term annuities – where you receive payments over a set number of years rather than for life – rates are also strong. As of January 2025, Standard Life’s rates stood at 21.91% over five years, 12.33% over ten years, and 9.18% over fifteen years. A 65-year-old investing £100,000 in a fixed-term annuity in January could receive total payments of £109,571 over five years, £123,346 over ten years, or £137,749 over fifteen years.

With annuity rates remaining competitive, Pete Cowell, head of annuities at Standard Life, expects demand to stay high.

“Wealthier savers may be encouraged to access more of their pensions, with annuities becoming an increasingly attractive way of doing so,” he said. He also touched upon the flexibility of annuities and how advisers are “using annuity products and options to create more tailored retirement journeys that meet specific needs in retirement”.

How to secure the best available annuity rate

If you are considering an annuity, now could be the right time to explore your options. Our Annuity Specialists will search rates from the UK’s leading annuity providers, including Standard Life, Aviva, Just – often securing a higher retirement income than your existing provider can offer.

Call today on 0800 652 1316 or request a callback for the help you need today.

Source

Standard Life report 5% rise in annuity rates. Annuity rates increase by 8% in past year. FT Adviser. Accessed 20 March 2025.