Annuity rates have reached 7.72% for a healthy 65-year-old, up 64% since July 2020 when rates stood at just 4.71%.

Rates are also up 10.2% compared to May last year, when the average annuity rate stood at approximately 7%.

It means that a 65-year-old considering taking out an annuity could expect to receive an annual income of £7,720, based on a £100,000 pension pot.

The figures are from the Standard Life Annuity Rates Tracker which monitors current average annuity rates across the market for those annuitising at ages 60, 65, and 70.

It also shows the total lifetime income from an annuity and the extent to which annuity rates improve with age, as well as the total income possible from a fixed-term annuity.

Pete Cowell, head of annuities at Standard Life, said: “Our latest Annuity Rates Tracker shows annuity rates surged to their highest levels in years, offering retirees one of the strongest opportunities yet for securing a guaranteed income in retirement. This uplift has been driven by higher long-term interest rates.

“While the recent upward trend has been steady, it feels unlikely annuity rates will fall back to historic lows. Interest in annuities is likely to remain strong, particularly given the anticipated changes to IHT in 2027, which may prompt more people to consider annuities as part of their retirement planning.”

According to the Tracker, a healthy 65-year-old male who bought an annuity in May 2025 at a rate of 7.72% could expect a total lifetime income of £155,180. For a female of the same age, the expected income was £172,940.

Meanwhile, a healthy 70-year-old who bought an annuity in June 2025, could expect a rate of 8.54%. For a man, this would provide a total lifetime income of £136,680 while a woman could expect to receive £153,770. 

*Total expected income figures are based on life expectancy statistics from the Office of National Statistics, based on age annuity is first purchased. Total expected income includes annuity income only.