Annuity Rates Calculator — Slide to See Your Income

Think of an annuity as swapping a pile of money for a promise: hand your pension pot to an insurer, and in return they promise to pay you an income for as long as you're alive — whether that turns out to be two years or thirty-two. An annuity rates calculator is just the tool that turns "here's my pot" into "here's roughly what that promise is worth."

What makes it different from drawdown is that once it's set up, nobody can take it away from you. Markets crash, interest rates swing about, your income doesn't move an inch (unless you've chosen one that's designed to rise). For a lot of retirees, that certainty is worth more than the chance of a bigger number from investing instead.

Run your numbers through this calculator and you'll get your monthly and yearly income side by side, your tax-free lump sum, and a feel for how single versus joint life, or flat versus rising income, would each change the outcome.

Here's the headline worth knowing before anything else: annuity rates are sitting at roughly an 18-year high right now, in mid-2026, thanks to gilt yields climbing sharply since 2022. A healthy 65-year-old buying a single-life, level annuity with no guarantee can typically expect somewhere around 7% to 7.9% of their pot back as income every single year — a world away from the roughly 4.5% on offer back in 2020.

The older you are when you buy, the more you get, plain and simple — the insurer is pricing in fewer years of payments. What follows is a rough guide using standard, single-life, level rates as they stand today. Your own quote could land above or below this depending on the provider you go with.

Don't treat this table as a quote — it isn't one. Two people the same age, same pot size, same postcode even, can get noticeably different offers from different insurers. Get at least three quotes before you buy anything, or lean on MoneyHelper's free comparison tool to do the legwork.

If you looked at annuities back in, say, 2019, you'd have been forgiven for thinking they were a bit of a rip-off. Base rates were glued near zero, gilt yields had nothing to give, and a 65-year-old with £100,000 could expect barely £4,300–£4,600 a year for it. Grim, honestly. Then the Bank of England started raising rates from December 2021 onwards, gilt yields followed, and annuity rates came roaring back to life — up more than 50% from their lowest point.

We're now close to the best rates seen in around 18 years, though still nowhere near the double-digit annuity rates your parents (or grandparents) might have enjoyed back in the 1990s. Most forecasters reckon rates will stay roughly where they are through the rest of 2026, drifting a percent or two either way depending on inflation and what the Bank of England does next. For what it's worth, trying to time this market rarely works out — every year you wait is also a year of income you didn't get.

Here's one of the odder quirks of retirement finance: being unwell can actually get you paid more, not less. An enhanced (or impaired life) annuity pays a higher income to people with certain health conditions or lifestyle factors — smoking, a higher BMI, and so on — simply because the insurer expects to be paying that income for less time.

High blood pressure, high cholesterol, diabetes, heart disease, cancer, being a regular smoker — any of these can bump your offer up. Whole-of-market comparisons have found uplifts ranging from around 6% to 15% for the same profile, and considerably more for serious conditions. So even something you'd consider fairly minor is worth mentioning when you get quotes — leaving it off the form only costs you money.

Worth knowing if your pot is on the smaller side: most insurers won't touch anything below roughly £10,000–£30,000, since the fixed admin costs stop making sense on tiny sums. And nobody says you have to put the whole pot in — plenty of people do a partial annuitisation instead, buying just enough guaranteed income to cover the bills, then leaving the rest in drawdown where it can keep growing.

You are never obliged to buy your annuity from the company that holds your pension. The Open Market Option is your legal right to take your pot to any provider — and shopping it properly, rather than defaulting to your existing pension company, can lift your income by 10% to 20%, sometimes more. Two more things quietly shape your rate on top of age and health: pot size (bigger pot, bigger income, same percentage) and gilt yields — insurers largely fund annuity payments by buying government bonds, so when gilt yields climb, so do the rates they can offer.

A guarantee period — 5 or 10 years, say — makes sure payments keep going to someone even if you die shortly after buying, and it only costs you 1% to 3% off your starting income, which strikes most people as a fair trade.

One reassurance worth knowing: annuities from FCA-regulated UK insurers are protected by the Financial Services Compensation Scheme (FSCS) at 100%, with no upper cap, should the provider ever fail — stronger protection than most savings products receive. But if there's one lever worth pulling harder than any of these, it's simply not accepting the first offer. Sticking with your existing pension provider instead of exercising your Open Market Option is one of the more expensive mistakes people make at retirement.

A handful of big insurers cover most of the UK annuity market, and here's the thing nobody tells you upfront: the "best" one changes depending on who's asking. There's no single provider that wins for every age, health profile and product type. As of mid-2026, names that keep turning up near the top of best-buy tables for standard, single-life annuities include:

Aviva — frequently competitive for standard single-life rates around age 65. Legal & General (L&G) — a consistently strong all-round provider, including for enhanced annuities. Scottish Widows — often leads on joint-life and escalating/RPI-linked annuities. Canada Life — a long-standing major player, competitive on enhanced rates. Standard Life, Just Group and Hodge Life — regularly feature in best-buy comparisons, particularly for enhanced and impaired-life quotes.

The insurer that pays a healthy 60-year-old the most might not pay a 75-year-old with a health condition the most — it genuinely varies that much. MoneyHelper runs a free comparison tool, and brokers like Hargreaves Lansdown, Age Partnership and Retirement Line will shop the whole market for you.

Yes, and it catches some people out. The 25% tax-free lump sum you take before buying the annuity really is tax-free (up to the standard Lump Sum Allowance of £268,275 for most people) — but everything the annuity itself pays you afterwards is treated as ordinary taxable income, taxed through PAYE just like a salary or a workplace pension would be.

That matters because it stacks on top of your State Pension and any other income when HMRC works out your tax band — enough total income and you could find yourself paying more tax than you expected. If your annuity is set up to keep paying a partner after you die, the tax treatment of that depends on your age when you die and the exact type of annuity, so it's worth a specific conversation with your provider or an adviser rather than assuming.

If your pension dates back to the 1980s or 1990s — an old-style personal or retirement annuity policy, especially — go and check the paperwork before you do anything else. Some of these carry a guaranteed annuity rate (GAR) baked into the contract, occasionally offering 10%+ a year, which utterly dwarfs anything you'd find shopping the open market today.

Ring your existing provider and ask them, point blank, whether a GAR is attached to your policy, and what strings come with it — some only pay out at a specific age or with specific options selected. If you've genuinely got one, it will almost certainly beat every other quote you could get, so this is worth checking even if your pension feels small or forgotten about.

You don't actually have to pick one and walk away from the other. A lot of people quietly do both — a small annuity to guarantee the essentials get paid (rent, food, bills), with the rest left in drawdown where it can still grow and gets passed on if there's anything left. Partial annuitisation, it's called, and it's often the most sensible middle ground of the lot.

Picture someone with a £100,000 pot, turning 65 this year. They take the usual 25% tax-free lump sum — £25,000 straight in the bank, no tax owed — leaving £75,000 to actually buy the annuity, single life, level, no guarantee attached.

At today's going rate of roughly 7.75% for a healthy 65-year-old, that £75,000 buys an income of about £5,800 a year, or £483 a month, for as long as they're alive — could be five years, could be thirty.

Change the shape of it and the number moves. Go joint life at 100% and it dips to around £5,300 a year, but now it keeps paying a surviving partner too. Pick 3% increasing income instead of level and you're starting lower still, around £4,500 a year — the trade being that it climbs every year after that rather than sitting flat. None of these is objectively right; it comes down to what actually matters for your situation. Try your own numbers above and see how it shifts.

Official sources & further reading: read annuity guidance at MoneyHelper, check gilt yields at the Bank of England, and see retirement income standards from the PLSA. Browse every tool on the mortgage calculators homepage.