Building a digital annuity experience that works for advisers

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Encouragingly, more people now recognise the value of guaranteed income in retirement and are becoming more aware of the options available to help them build greater financial certainty later in life.

Understanding of annuities among over 50s has risen sharply, with two-thirds (67%)¹ now correctly identifying that annuities provide a guaranteed income for life, an 18% rise compared with 2024 (49%)². 

With annuity rates having strengthened in recent years, reaching 7.6% in March 2026³, and the appeal of guaranteed income growing amid ongoing economic uncertainty, more people are revisiting annuities to secure long term financial certainty in retirement.  

Awareness of key annuity features is improving. For example, the proportion recognising that some annuities can increase in line with inflation rose from 20% to 25%. Understanding of investment risk has also grown, with 40% now aware annuities carry no investment risk, compared to 34% in 2024. 

Growing understanding of flexibility 

Knowledge around product options and design features have also strengthened: 

• More over-50s now understand they do not need to use their full pension pot to purchase an annuity (37% in 2025 vs 31% in 2024) 
• Awareness that an annuity can provide an income over a spouse’s lifetime has increased (38% in 2025 vs 30% in 2024)  
• More people now recognise that annuities can be used alongside drawdown (35% in 2025 v 30% in 2024)  

More people approaching retirement now understand what annuities do best: provide a guaranteed income they can rely on. With cost of living pressures still front of mind, it’s encouraging to see growing awareness of inflation-linked options and how these can protect your income over time. This is reflected in the latest industry data which shows sales of escalating annuities up 10% in 2025³.   

Persistent gaps in knowledge 

Despite strong progress, several important aspects of annuities remain less widely understood. 

• An annuity doesn’t have to be bought at the point of retirement: Only 33% (31% in 2024) of people know that an annuity can be bought at any point in their retirement, with various amounts of money. In practice, some people choose to buy later and may benefit from higher rates as they age. 
• Having underlying medical or health conditions doesn’t mean you get worse rates: While many assume that health issues make insurance products more expensive, enhanced annuities can offer higher income to those with certain medical conditions or shorter life expectancy. Our internal analysis shows customers could receive around 9% more income through underwriting. Yet just 22% of over 50s (18% in 2024) are aware that health conditions can improve the rate they receive. 

Demand for annuities has continued to grow as more people balance flexibility with the comfort of guaranteed income. We’re also seeing some customers use annuities as part of broader estate planning, and our internal data shows around three-quarters of annuity purchases are now made with pension pots over £50,000, compared to 49% at the start of 2025. 

However, many people still value flexibility, and Government findings show that a significant proportion of those nearing State Pension age feel under prepared for the decisions ahead.4 This lack of confidence increases the risk of people drawing down savings too quickly or missing out on options that could provide greater stability later in life. As the retirement landscape continues to evolve, clear and accessible information about the role annuities can play will be essential to helping them make better decisions and achieve lasting financial security.

As well as showing stronger understanding of guaranteed income, the research is a useful reminder that there is still a clear role for education in helping customers navigate retirement choices. It reinforces the importance of continuing to explain annuities in a simple, accessible way, particularly where flexibility, later-life purchase, and health-related underwriting are concerned.

Source

¹Research conducted by Opinium with a nationally representative sample of 2,000 UK adults aged 50 and over between 27 August and 1 September 2025. Participants were asked a series of true/false statements in relation to annuities.  

²Comparison with research last year, commissioned by Standard Life and conducted by Opinium with a nationally representative sample of 2000 over 50 years old, between 25th July - 12th August 2024

³Standard Life Annuity Rate Tracker – April 2026

⁴Planning and Preparing for Later Life 2024 - GOV.UK