• 41% of over 50s say the cost-of-living crisis is the main barrier that might prevent them from securing the retirement income they think they’ll need
  • One in 10 are more likely to purchase an annuity as a result – citing income certainty, security and simplicity as key reasons
  • Other barriers to securing retirement income include changes to the state pension, tax rises, stock market performance and not seeking advice
  • Half of over 50s expect personal financial situation to get worse over the next year

The cost-of-living crisis has been identified as the main barrier for two fifths (41%) of over 50’s that might prevent them from securing the income they think they’ll need in retirement, according to research from Standard Life, part of Phoenix Group. A further one in ten with a DC pension or SIPP (11%) say they are more likely to purchase an annuity with their pension pot in light of the cost-of-living crisis, and one in ten already are, according to FCA data3.

According to the research[1], which explores how the high cost of living over the last year has driven changes in how people plan to use their retirement savings, over a third (38%) cite certainty that an income would be guaranteed for life as a key reason why there are more likely to purchase an annuity in the current climate. Others cite simplicity (34%) as well as security in the knowledge that the amount of income won’t change (32%).

Top 5 reasons among the over 50’s who say that are more likely to purchase an annuity in response to the cost-of-living crisis:

Reason Percentage of over 50's
1. Certainty – providing a guaranteed income for life 38%
2. Simplicity – I don’t have to think about it again after I’ve purchased it 34%
3. Security – providing a guaranteed regular income, knowing the amount won’t change 32%
4. Peace of mind – if I die before my spouse (if joint life annuity is purchased) 24%
5. Annuity rates are currently high - it’s a good time to purchase annuities 24%

Other barriers cited by over 50’s that might prevent them from securing the income they think they’ll need in retirement include potential changes to the state pension (24%), tax rises (17%), performance of the stock market (15%) and retiring early due to ill-health (13%), and not seeking out advice (8%). This comes as almost half (48%) of over 50’s expect their own financial situation to get worse over the course of the year. Just 16% expect their own personal finances to get better.

Pete Cowell, Head of Annuities – Individual Retirement at Standard Life, commented: “In a cost-of-living crisis, in which every penny counts, annuities can offer what many people are looking for in retirement – certainty and security, knowing that their money will last as long as they do. The income security benefits of annuities are well-known, however with the improvement in annuity rates, which have seen a total increase of 48% since the start of 2022[2], they also offer a better level of income.

Pete continued: “While annuities can be purchased standalone, it’s also important to bear in mind that they can also work well in combination with other retirement income solutions, such as drawdown. People may opt to buy an annuity with a portion of their savings and invest the remainder, which gives people certainty about their ability to meet fixed costs. They can take some risk on the money that remains invested while maintaining flexibility over when and how they access it. Alternatively, buying an annuity at different stages of retirement allows people to benefit from annuity rates, which increase with age. Whatever the course of action, a mix and match approach suited to individual circumstances can often be an ideal way to get the best of both worlds – security in the current economic climate, but also flexibility for the future.”




Notes to editors:

[1] The research was commissioned by Standard Life and conducted by Opinium, with a nationally representative sample of 2000 over 50 years old, between 6th- 14th March 2023.

[2] Standard Life annuity rate tracker (July 2023): annuity rates have increased by 20% in the twelve months to June 2023, with a total increase of 48% since the start of 2022 for a 65-year-old. Annuity rates data provided by AMS Retirement. Accurate as of June 2023.

[3] Figures available from the FCA – Retirement income market data 2021/22 - Retirement income market data 2021/22 | FCA

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For further information, photos, video content or interviews, contact:

Jennifer Smallwood/Samantha Griffith
Senior PR Manager/PR Consultant

Standard Life, part of Phoenix Group
07858 367818 / 07752 465345
Jennifer_Smallwood@standardlife.com / samantha_griffith@standardlife.com

Notes to editors

About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples’ life savings for nearly 200 years
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers’ pension scheme.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We’re proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people’s needs, helping our customers to invest and save for their future. We’re proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about.
  • Standard Life is the proud headline sponsor of Race for Life, Cancer Research UK’s flagship fundraising event series.

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