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Why choose an annuity?
Annuity rates are now at some of the highest levels we've seen in over 15 years**. That’s because interest rates have gone up and that means better income for you when you lock in a rate.
An annuity turns your pension savings into a guaranteed income either until you die or a set number of years. It’s a popular option for people who want peace of mind and a steady income in retirement. It’s especially worth considering if you want to remove the risks of investing and you’d prefer a fixed income you can rely on.
An annuity is also a great option if you have health conditions as you might qualify for more income with an enhanced annuity.
It’s a great time to explore your options. But annuities are a long-term decision and once you’ve bought one, it can’t usually be changed. That’s why it’s so important to get the right advice now and make sure you're getting the best deal for your retirement with expert FCA-regulated advice.
How to get the best annuity rate for you
Shop around
Most people don’t realise that they don’t have to accept the first offer from their pension provider. You have the right to shop around. In fact, retirees who compare quotes often get up to 30% more income than those who don’t. That’s money you could be missing out on for life.
Consider your personal situation
A single-life annuity pays out a regular income just for you — and usually gives you the highest starting income. But it stops when you die.
If you're married or have a partner who depends on your income, a joint-life annuity may be a better choice. It pays a bit less upfront, but it continues to provide for your partner if you pass away first.
Be Honest About Your Health
Don’t hold back when sharing your health and lifestyle details — it could boost your income. If you have certain conditions (like high blood pressure, diabetes, or if you smoke), you may qualify for an enhanced annuity, which could pay you up to 30% more.
Many people are surprised to find they’re eligible, even for common issues. It’s worth checking.
Think About Rising Prices
A standard annuity pays the same amount every year — which is simple, but it won’t go up with inflation. That means over time, your money may not go as far.
If you’re worried about rising living costs, an inflation-linked annuity increases your income each year to help keep pace. Just be aware: it starts lower, and it can take years before you catch up to the income you’d get from a level annuity — and even longer to come out ahead overall.
Annuity types explained
- Single Life Annuity
Great for maximising your own income as pays the highest monthly amount but stops when you pass away.
- Joint Life Annuity
Pays a slightly lower income, but continues for your partner or spouse after you die.
- Fixed Term Annuity
A great option for bridging to your state pension. A fixed term annuity pays a guaranteed income for a set term (e.g. 5 or 10 years).
- Escalating Annuity
Protecting against inflation Starts lower, but increases by a set amount (e.g. 3% per year)
- Enhanced Annuity
A solid option if you have health or lifestyle risks. An enhanced annuity pays up to 30% more if you qualify (e.g. for high blood pressure, diabetes, or smoking history).
It’s important to speak to a pension adviser who can look at your personal situation and recommend the best option for your retirement.
Do I qualify for an enhanced annuity?
Most of the time, having a health condition means paying more whether it’s for travel insurance or other financial products. But with annuities, the opposite can be true.
If you have certain health issues or lifestyle factors (like smoking or high blood pressure), you may qualify for an enhanced annuity, which could mean more income for you - sometimes up to 30% more.
That’s because providers take life expectancy into account. If they expect to pay out for fewer years, they can afford to offer a higher income.
For example, in June 2025, we ran quotes for a healthy 65-year-old with a £100,000 pension pot. Someone with certain health conditions such as being overweight, smoking, and taking medication for blood pressure and cholesterol was offered between 6% and 15% more income from providers like Aviva and Legal & General, simply because they qualified for an enhanced annuity.
If you have any health conditions or lifestyle factors, it’s well worth checking many people are eligible without realising it.
