UK annuity rates by age - July 2026 table
An annuity rate is simply the annual income an insurer will pay per £100,000 of pension, guaranteed for life. The table below shows what £100,000 bought in early July 2026 for a healthy buyer at each age, across the three shapes most people compare: level single-life (highest starting income, never rises), level joint-life with a 50% spouse's pension, and RPI-linked single-life (starts much lower, rises with inflation).
| Age | Level single-life | Level joint-life (50%) | RPI-linked single-life |
|---|---|---|---|
| 60 | £7,078 (7.08%) | £6,756 (6.76%) | £4,634 (4.63%) |
| 65 | £7,936 (7.94%) | £7,341 (7.34%) | £5,304 (5.30%) |
| 66* | £8,080 (8.08%) | £7,460 (7.46%) | £5,460 (5.46%) |
| 67* | £8,230 (8.23%) | £7,580 (7.58%) | £5,610 (5.61%) |
| 70 | £8,676 (8.68%) | £7,947 (7.95%) | £6,075 (6.08%) |
| 75 | £9,929 (9.93%) | £8,761 (8.76%) | £7,334 (7.33%) |
Annual income per £100,000, paid monthly in advance, average postcode. Source: Hargreaves Lansdown Best Buy Annuity Rates, generated 2 July 2026. Level shapes have no guarantee period; RPI figures are the published single-life RPI rates with a 5-year guarantee. Joint-life assumes a spouse three years younger. *Ages 66 and 67 are our estimates, interpolated between the published 65 and 70 figures - always get a personalised quote. Rates change daily with gilt yields.
Three patterns worth reading out of the table. First, the age gradient: each year you wait adds roughly £150-£250 a year of income per £100,000, because the insurer expects to pay for fewer years - a 75-year-old's 9.93% is 2 percentage points above a 65-year-old's. Second, the cost of the spouse's pension: a 50% joint-life at 65 pays about £595 a year less than single-life - roughly 7.5% of income - to keep half the payment going for your partner's lifetime. Third, the inflation-protection haircut: RPI-linking cuts the starting income by a third at 65. Whether that trade is worth it is the break-even question we work through below.
Annuity income by pot size - £50k to £500k at age 65
The rate scales linearly, so the maths per pot size is simple multiplication - but seeing your own number matters, and each pot size raises different planning questions (tax bands, PLSA living standards, whether to go hybrid). The table uses the 7.86% best single-life level rate for a healthy 65-year-old (Aviva, 1 July 2026) and shows income both before and after taking the 25% tax-free lump sum first.
| Pension pot | Annuity on full pot | 25% tax-free cash | Annuity on remaining 75% | Full guide |
|---|---|---|---|---|
| £50,000 | £3,930/yr | £12,500 | £2,948/yr | - |
| £100,000 | £7,860/yr | £25,000 | £5,895/yr | £100,000 pot guide |
| £150,000 | £11,790/yr | £37,500 | £8,843/yr | £150,000 pot guide |
| £200,000 | £15,720/yr | £50,000 | £11,790/yr | £200,000 pot guide |
| £250,000 | £19,650/yr | £62,500 | £14,738/yr | £250,000 pot guide |
| £300,000 | £23,580/yr | £75,000 | £17,685/yr | £300,000 pot guide |
| £500,000 | £39,300/yr | £125,000 | £29,475/yr | £500,000 pot guide |
Level single-life, healthy 65-year-old, at the 7.86% best rate (Aviva, 1 July 2026). Tax-free cash is within the £268,275 Lump Sum Allowance at every pot size shown. Annuity income is taxable; the lump sum is not.
Remember the State Pension stacks on top of all of these. The full new State Pension is £12,547.60 a year (£241.30 a week) in 2026/27 - so a £100,000 annuity at 65 plus a full State Pension from 67 gives a guaranteed-for-life income of about £20,400 a year. Because the State Pension alone uses up almost the entire £12,570 Personal Allowance, virtually every pound of annuity income on top is taxed at 20% - see how pension income is taxed for the full band-by-band picture.
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What actually drives annuity rates
Annuity pricing is not a mystery - it comes down to six inputs, only some of which you control:
- Long-dated gilt yields. Insurers back annuities largely with UK government bonds, so rates track the roughly 15-year gilt yield. When yields rose sharply from 2022, annuity rates followed within weeks. This is the input nobody controls and the reason rates change daily.
- Your age. Older buyers get higher rates because the expected payment period is shorter - roughly £150-£250 more per year per £100,000 for each year of age in the mid-60s to mid-70s range.
- Your health and lifestyle. Smoking, diabetes, heart conditions, blood pressure, cholesterol, weight and serious medical history all qualify for enhanced rates 10-40% above standard. Even your postcode feeds the longevity model.
- The income shape. Level pays most from day one; 3% escalation starts about 27% lower at 65; full RPI-linking starts about 33% lower. The more future increases you buy, the less you get now.
- Single vs joint life. A 50% spouse's pension costs about 7.5% of income at 65 (more if your partner is much younger); a 100% survivor pension costs roughly double that.
- Guarantee periods and value protection. A 5-year guarantee at 65 costs under 1% of income (£7,936 vs £7,875 on HL's July 2026 table) - cheap insurance against dying early. Longer guarantees and capital protection cost progressively more.
- 1 I am single and want maximum income now→ Level single-life with a 5-year guarantee. At 65 that is ~£7,875 per £100k (July 2026) - only ~£61/yr less than no guarantee, and your estate gets the balance of 5 years' payments if you die early.
- 2 I have a spouse or partner who depends on this income→ Joint-life 50% or 100%. At 65 a level joint-50% pays ~£7,341 per £100k. A single-life annuity that dies with you can leave a surviving partner with nothing but their State Pension - this is the most consequential tick-box on the quote form.
- 3 I am worried about inflation over a 25-30 year retirement→ RPI-linked or 3% escalating - or a hybrid. RPI at 65 starts at ~£5,304 per £100k. Alternatively keep part of the pot in drawdown as your inflation hedge and buy a level annuity with the rest.
- 4 I smoke, take regular medication, or have a diagnosed condition→ Get enhanced quotes before anything else - uplifts run 10-40% and providers differ by 15-20% on the same impairment. Never accept a standard quote without completing the medical questionnaire honestly and fully.
Enhanced annuities: the 10-40% uplift most people never claim
Around half of annuity buyers could qualify for an enhanced rate, yet a large share never complete the medical questionnaire. The logic is cold but works in your favour: if the insurer expects to pay you for fewer years, it pays you more each year. Qualifying factors include:
- Lifestyle: smoking (typically 10-15% uplift on its own), heavy historic smoking, high alcohol intake, obesity.
- Common conditions: type 2 diabetes, high blood pressure, high cholesterol - especially in combination, and especially if medicated.
- Serious history: heart attack, stroke, cancer, COPD, kidney or liver disease - uplifts here can reach 30-40% or more.
Two practical rules. First, disclose everything - unlike life insurance, poor health raises your annuity income, so there is no incentive to hold back. Second, get at least three enhanced quotes: providers' underwriting models price the same impairment 15-20% apart, a bigger spread than the standard market. On a £100,000 purchase, that spread alone can be worth £1,000+ a year for life.
Level vs inflation-linked: the break-even maths
The hardest annuity decision is whether to protect against inflation. At 65 in July 2026 the choice per £100,000 is stark: £7,936 level versus £5,304 RPI-linked - a £2,632 (33%) starting-income haircut for the inflation protection. Here is when the RPI route catches up, assuming inflation runs at 3% a year:
| Milestone (3% inflation) | Age | What happens |
|---|---|---|
| Annual income crossover | ~79 | After ~14 years the RPI annuity's yearly payment (£5,304 grown at 3%) overtakes the level £7,936. |
| Total-cash crossover | ~91 | Only after ~26 years does the cumulative amount received from the RPI annuity exceed the level one. |
| Purchasing power of level income | 85 | At 3% inflation the level £7,936 is worth only ~£4,390 in today's money after 20 years. |
Illustration using HL best-buy rates, 2 July 2026, at constant 3% RPI. Higher inflation pulls both crossovers earlier; lower inflation pushes them later.
ONS cohort life expectancy for a 65-year-old is around 85 for men and 87 for women - both short of the ~91 total-cash crossover. That is why most buyers choose level: on average expectations it pays more in total. But averages are not the point of insurance. The level buyer who lives to 95 spends their final decade on an income worth barely half its original purchasing power. A defensible middle path is a hybrid: level annuity for essentials, with drawdown (or a later annuity purchase at a higher age rate) as the inflation hedge - the approach we cost out in drawdown vs annuity.
How to get the best annuity rate
FCA Retirement Income Market Data 2024/25 shows 62% of annuities were bought from a different provider to the one holding the pension - which means nearly 4 in 10 buyers still took their incumbent's unshopped rate. The best-to-worst spread on identical standard quotes is routinely 5-10% of income; on enhanced quotes, 15-20%. On a £100,000 purchase that is £500-£1,500 a year, every year, for life - for one hour of comparison.
Pension Wise (part of MoneyHelper) offers a free, impartial, government-backed guidance appointment - book at moneyhelper.org.uk. For pots over ~£100,000, or any complex health picture, a regulated adviser or whole-of-market annuity broker usually pays for itself.
The checklist, in order:
- Complete the health and lifestyle questionnaire fully, before comparing anything - it changes which provider is cheapest.
- Compare whole-of-market, not just your pension company's offer - the open market option is a legal right.
- Decide the shape first (single/joint, level/escalating, guarantee period) so you compare like with like.
- Take the 25% tax-free cash decision separately - annuitising the full pot forfeits it.
- Consider phasing - buying in two or three tranches over several years captures higher age-related rates and averages out gilt-yield timing.
- Move promptly on a good quote - annuity quotes are typically guaranteed for only 14-30 days.
One more planning wrinkle: from 6 April 2027, unused defined-contribution pension funds fall into the estate for inheritance tax. That change tilts the maths slightly in favour of annuitising (income you spend cannot be taxed at 40% on death) and is worth factoring into any annuity-vs-drawdown decision made this year.
Frequently asked questions
- What is the annuity rate for a 65 year old in the UK?
- In early July 2026 the best single-life level annuity rate for a healthy 65-year-old was around 7.86% (Aviva, 1 July 2026), with Hargreaves Lansdown's best-buy table showing £7,936 a year per £100,000 (7.94%) on 2 July 2026. So a healthy 65-year-old converting £100,000 gets roughly £7,860-£7,940 a year for life, before tax. Add a 50% spouse's pension and it falls to about £7,341; make it RPI-linked and the starting income drops to about £5,304 but rises with inflation each year.
- How much annuity income does £100k buy?
- At July 2026 best-buy rates, £100,000 buys a healthy 65-year-old about £7,860-£7,936 a year (level, single-life) - roughly £655 a month before tax, guaranteed for life. At 60 it is about £7,078 a year; at 70, £8,676; at 75, £9,929. An RPI-linked version at 65 starts at about £5,304 but increases with inflation. Smokers and people with qualifying health conditions can get 10-40% more through an enhanced annuity. Remember you can usually take 25% of the pot tax-free first, so many people annuitise £75,000 of a £100,000 pot (~£5,900/yr at 65).
- Are annuity rates going up or down in 2026?
- Annuity rates in 2026 are holding at a high plateau rather than climbing. Rates for a healthy 65-year-old have been above 7% since 2022 and consistently above 7.5% since the start of 2025 - close to 18-year highs. Annuity pricing tracks long-dated gilt yields (roughly the 15-year gilt), so rates would only fall meaningfully if gilt yields dropped - for example if the Bank of England cut rates faster than markets expect. Nobody can time the annuity market reliably; if today's income covers your needs, waiting for a better rate risks losing months of guaranteed income for an uncertain gain.
- What is better, an annuity or drawdown?
- Neither is universally better - they solve different problems. An annuity converts your pot into guaranteed income for life: no market risk, no running-out risk, but inflexible and (for standard shapes) nothing left for heirs. Drawdown keeps the pot invested: flexible, inheritable, but exposed to market falls and longevity risk. FCA data shows drawdown outsells annuities roughly 4:1, but annuity sales have grown strongly since rates hit 18-year highs. Many advisers now recommend a hybrid: annuitise enough to cover essential bills, draw down the rest. See our drawdown vs annuity guide for the full comparison.
- Do I pay tax on an annuity?
- Yes - annuity income from a pension is taxable as ordinary income, exactly like a salary or the State Pension. The provider deducts tax through PAYE before paying you. In 2026/27 the full new State Pension of £12,547.60 uses almost all of the £12,570 Personal Allowance on its own, so an annuity paid on top is effectively taxed at 20% from the first pound (or 40% above £50,270 of total income). The 25% tax-free lump sum you can take before buying the annuity is the exception - that part is tax-free, within the £268,275 Lump Sum Allowance.
- What happens to my annuity when I die?
- It depends entirely on the shape you bought. A single-life annuity with no guarantee stops dead - even if you die a year in. A guarantee period (5 or 10 years) keeps payments going to your estate or beneficiary for the rest of that period. A joint-life annuity continues paying your spouse or partner a chosen percentage (typically 50% or 100%) for their lifetime. Value protection can return the unused purchase price minus income paid. These protections cost surprisingly little - a 5-year guarantee at 65 trims income by well under 1% - so most buyers should consider one. Payments after death may be income-tax-free if you die before 75.
- Can I get a higher annuity rate if I smoke or have health conditions?
- Yes - this is the single most under-used lever in the annuity market. Enhanced (or "impaired life") annuities pay 10-40% more than standard rates for smokers, people with diabetes, heart conditions, high blood pressure, high cholesterol, obesity or a history of serious illness, because the insurer expects to pay for fewer years. Even lifestyle factors like weight and prescription medication count. Crucially, providers price the same impairment 15-20% apart, so always disclose everything on the medical questionnaire and get quotes from at least three providers.
- What is the best annuity rate right now?
- As of early July 2026, the best published single-life level rate for a healthy 65-year-old was 7.86% from Aviva (1 July 2026), with HL's best-buy table showing £7,936 per £100,000 on 2 July. Across ages, standard rates span roughly 5.95% to 9.45% - a healthy 75-year-old can get about 9.9% at best buy. But "best rate" is personal: your age, postcode, health, and chosen shape (joint, escalating, guaranteed) all move the number. The only way to find your best rate is a whole-of-market quote comparison, ideally including enhanced-rate underwriting.
- Can I buy an annuity with part of my pension?
- Yes. There is no rule forcing an all-or-nothing choice. You can annuitise any slice of your pot and leave the rest in flexi-access drawdown - and you can buy further annuities later, when age (and possibly health changes) mean better rates. A common strategy is to annuitise enough that, combined with the State Pension, guaranteed income covers your essential bills, then draw down the remainder flexibly. Buying in stages also averages out rate risk rather than locking your entire pot at one day's pricing.
- Why do annuity quotes differ so much between providers?
- Each insurer prices against its own book of business, longevity assumptions, hedging costs and appetite for new business - and appetites change month to month. The gap between the best and worst standard quote for the same person is routinely 5-10% of income; for enhanced annuities it can be 15-20%. FCA Retirement Income Market Data for 2024/25 shows 62% of annuity buyers moved away from their existing pension provider to buy - meaning nearly 4 in 10 still took whatever their incumbent offered. On a £100,000 purchase, failing to shop around can cost £500-£800 a year, every year, for life.
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