Best annuity rates UK 2026Annuity rates in the UK have improved significantly since 2022 as interest rates rose. A healthy 65-year-old can now buy approximately £6,500 to £7,200 of annual income per £100,000 of pension pot — a marked improvement on the £4,500 to £5,500 available in 2020 to 2021. Shopping around rather than accepting your pension provider default rate can add hundreds of pounds per year. Always shop around for an annuity — you are not obliged to buy from your pension provider. Using the open market can increase your income by 10 to 25%. If you have a health condition, an enhanced annuity can pay 20 to 40% more. Best annuity rates for a £100,000 pot (April 2026)
Rates are indicative as of April 2026 based on standard open market rates. Individual quotes will vary. Always obtain multiple quotes through an annuity broker or comparison service. Top annuity providers UK 2026
What is an enhanced annuity?An enhanced (or impaired life) annuity pays a higher income to people with qualifying health conditions or lifestyle factors. Conditions that may qualify include cancer (in remission), heart disease, diabetes, high blood pressure, obesity, and smoking. Providers offer enhanced rates because they expect a shorter payment period.
Annuity options to consider
How to get the best annuity rate
Verdict Shop the open market and declare your health The two biggest levers are using the open market (not your default provider) and declaring all health conditions. These two steps alone can increase your annual income by 20 to 40%. An annuity is an irreversible decision — take the time to compare properly. Frequently asked questionsIs now a good time to buy an annuity? Annuity rates are significantly better than they were in 2020 to 2022 thanks to higher interest rates. While rates may fall slightly if the base rate drops further, they are unlikely to return to pre-2022 lows. For those needing certainty, now is a reasonable time to buy. Can I cash in an annuity after buying? No. An annuity is irreversible once purchased — you cannot cash it in or change providers. This is why shopping around before committing is so important. What happens to my annuity when I die? A standard single-life level annuity stops on death with no further payments. A joint-life annuity continues paying a reduced amount to a surviving spouse. A guarantee period ensures payments continue to your estate for a minimum term. Do annuities keep up with inflation? Standard level annuities do not — their purchasing power falls each year. Inflation-linked annuities increase payments with RPI or CPI but start at a lower initial rate. The break-even versus a level annuity is typically 8 to 12 years. |
Best Annuity Rates UK 2026: Compare and Find the Best Deal
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