Annuity Rates Expected to Stay Higher for Longer – Is Now the Right Time to Buy?

With the Bank of England maintaining its base interest rate at 4.25%, many are asking whether now might be a smart time to consider locking in a guaranteed retirement income through an annuity.

After years of low returns, annuity rates have surged, driven by rising gilt yields and sustained higher interest rates. This presents a compelling opportunity for retirees exploring their pension options.

If you’re unsure how annuities fit into your retirement strategy, book a meeting with an adviser to explore your best options.

Annuity Income Potential in 2025

Recent data shows that a 65-year-old with a £100,000 pension could secure an annuity income of up to £7,900 per year, based on a single life, level annuity with a five-year guarantee, paid monthly in advance. While the pace of income increases has slowed from the previous peak, current annuity rates still offer significant value for those seeking long-term income stability.

This period of relative market stability could act as a turning point for many savers who were previously hesitant. While waiting for even higher rates may be tempting, there’s always the risk of missing out if market conditions change.

If you’re ready to discuss your retirement income options, find a financial adviser today and ensure you’re getting the best advice for your situation.

Things to Consider Before Buying an Annuity

Purchasing an annuity is a long-term decision—once you commit, you can’t reverse it. That’s why it’s vital to compare rates and products across the market.

Working with a top independent adviser ensures you’re accessing the best rates available and receiving personalised guidance. Don’t settle for the first offer; shopping around can add thousands to your retirement income over time.

It’s also important to disclose health and lifestyle details in your application. Conditions such as diabetes, high blood pressure, or a history of smoking could make you eligible for an enhanced annuity—one that pays out more due to reduced life expectancy. The more information you provide, the more accurate and favourable your quote may be.

An experienced certified financial advisor can help you navigate this process and identify the most suitable annuity options.

👉 Book a meeting with an adviser to review your annuity choices and get a personalised quote.

Flexibility in Your Retirement Strategy

It’s a common misconception that you need to use your entire pension pot to buy an annuity. In fact, you can annuitise in stages—using part of your pension to secure a reliable income now, while leaving the rest invested.

This hybrid approach allows for both income stability and growth potential through income drawdown, though the latter carries investment risk. By delaying part of your annuity purchase, you may also benefit from better rates later, as annuity payments typically increase with age.

If you’re weighing up how much of your pension to annuitise now versus later, speaking with an independent financial adviser is crucial. They can provide tailored insights based on your circumstances and retirement goals.

➡️ Don’t wait—book a meeting with a certified adviser to develop a strategy that offers both income security and flexibility.

Don’t Miss Out on a Competitive Quote

Annuity rates fluctuate and quotes are only valid for a limited time. If you’re nearing retirement and want to lock in today’s attractive rates, it’s important to act swiftly.

You can start by using an annuity comparison tool to explore your options, but for a fully informed decision, professional advice is essential.

For those over 50, the government’s Pension Wise service is available for free guidance. However, for tailored advice that considers your full financial picture, working with a financial advisor who offers independent service and transparent fees will deliver the greatest value.

✔️ Ready to explore your annuity options? Find a financial adviser near you and book a meeting with an adviser today to secure your financial future.

Important reminder: You can usually only access your pension from age 55 (rising to 57 in 2028). This article does not constitute personal financial advice. Always seek personalised guidance before making any investment decisions. Investments can go down in value as well as up, and you could get back less than you invest.

Founded in 2017, Fintuity has fast become one of the only digital Independent Financial Advisers (IFA) in the United Kingdom.  Fintuity offers a wide range of financial advisory services including pensions, protection, investments and mortgage advice. The key difference is that as an exclusively digital service, we can offer significant savings and a service that is direct to you and on demand.