• Press releases
  • Average annuity rates increased by 2.5% since January 2024 and remain steady throughout 2024
  • The Standard Life Annuity Rate Tracker reveals that average rates for a healthy 65-year-old have increased by c.2.5% since January 2024
  • This has added £3,360 and £3,720 to the total lifetime income expected for a healthy 65-year-old man and woman respectively

Annuity rates have increased by 2.5% since January 2024 for a healthy 65-year-old, according to the Standard Life Annuity Rates Tracker1. This has added £3,360 and £3,720 to the total lifetime income expected for a 65-year-old man and woman respectively.

This increase means that a 65-year-old considering taking out an annuity could expect to receive an annual income of £6,980 based on a £100,000 pension pot, an increase of £170 compared to the start of the year.

While annuity rates have increased overall since the start of the year, the last quarter did see a slight dip, with the rates for a healthy 60-year-old and 65-year-old falling by 1.75% and 1.48% respectively, and for a healthy 70-year old by 1.30%. However, with small fluctuations expected, annuity rates remain steady overall and continue to provide benefit of income certainty in retirement, something which 9 in 10 people say is important to them2.

Annuity rates – September
  Average annuity rate (September 2024) Average annuity rate (June 2024) Average annuity rate (January 2024) % change in rates since January 2024 Annual income difference
60 6.27% 6.38% 6.16% +1.75% +£110
65 6.98% 7.08% 6.81% +2.54% +£170
70 7.81% 7.91% 7.64% +2.26% +£170

About the Annuity Rate Tracker

The Tracker, developed by Standard Life, part of Phoenix Group, 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. This latest Annuity Rate Tracker reveals that while there was a small drop in rates between June and September 2024, annuity rates remain stable overall.

Total lifetime income*

According to the Tracker, a healthy 65-year-old male who bought an annuity in September 2024 at a rate of 6.98% could expect a total lifetime income of £140,270. For a female of the same age, the expected income was £155,630.

Meanwhile, a healthy 70-year-old who bought an annuity in September 2024, could expect a rate of 7.81%. For a man, this would provide a total lifetime income of £124,200, while a woman could expect to receive £139,820.

Total expected income: January - September 2024 - male*
  Total expected income (September 2024) Total expected income (January 2024) Total expected income difference
60 £153,590 £150,950 + £2,640
65 £140,270 £136,920 + £3,360
70 £124,200 £121,450 + £2,740
Total expected income: January - September 2024 - female*
  Total expected income (September 2024) Total expected income (January 2024) Total expected income difference
60 £169,260 £166,350 + £2,910
65 £155,630 £151,900 + £3,720
70 £139,820 £136,730 + £3,090

*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.

Improving rates with age

Purchasing an annuity earlier in retirement typically results in higher overall income. However, annuity rates tend to increase with age, meaning those who choose to buy an annuity later in retirement are likely to benefit from better rates.

As of the end of September 2024, rates for a healthy 60-year-old were 6.27% compared to 7.81% for a healthy 70-year-old. This results in an annual income of £6,270 for a 60-year-old versus the £7,810 a healthy 70-year-old may expect to receive on a £100,000 pension pot – a difference of £1,540.

Pete Cowell, Head of Annuities at Standard Life, part of Phoenix Group, said: “Our latest Annuity Rate Tracker shows that annuity rates remain steady and continue to provide the security and certainty people are looking for in retirement. This is certainly reflected in wider industry data, with a 38% increase in annuity sales from 2022/23 to 2023/243, demonstrating the increasing recognition on the valuable role annuities can play in providing guaranteed income.

"When considering retirement income, it’s important to be thinking about any essential expenditure you may have – such as utility bills or mortgage payments – and how best to meet these costs. An individual annuity can play a valuable role here in providing a guaranteed income that won’t change, which can also alongside other income sources. Annuities also offer peace of mind, which can be a price itself for those who value more certainty when it comes to their retirement planning.”

ENDS

Media enquiries

For further information, please contact:

Samantha Griffith
PR Manager
Standard Life, part of Phoenix Group
07752 465345
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 the 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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