The popularity of annuities has continued to grow, with the average annuity purchase size increasing by over 160 per cent since 2021, according to research from Hargreaves Lansdown.

The research found that the average annuity purchase size increased from £62,301 in the first six months of 2021 to £162,729 in the same period of 2025.

The firm suggested that whilst 2024 was the best year for annuities since the introduction of freedom and choice, 2025 looks set to build on this momentum, with more and more people making use of annuities as part of their retirement planning

Indeed, Hargreaves Lansdown head of retirement analysis, Helen Morrissey, highlighted the trend as an indication that the values on offer are appealing to a greater range of people, arguing that this "flies in the face of the idea that people with bigger pension pots opt for income drawdown".

Morrissey said the reason for the rise in annuity purchases was “easy” to see when considering market trends over the past few years, pointing out that annuity rates have "boomed" off the back of soaring interest rates and high gilt yields.

She also emphasised that even the recent decision from the Bank of England to cut rates has had little impact on the incomes on offer to consumers.

"The most recent data from HL’s annuity comparison service shows a 65-year-old with a £100,000 pension can get up to £7,793 per year with a single life level annuity with a five-year guarantee," she explained.

"This is close to all-time highs and a vast improvement on the £4,943 available in August 2021."

Given this, she explained that people seeking some guaranteed income are increasingly choosing to “lock in”.

However, she admitted that the irreversible nature of annuity purchases means product choice remains critical, stressing the need for savers to do research.

In particular, Morrissey pointed out that factors such as partner provision, inflation protection, and the balance between annuitisation and drawdown should all be taken into account.

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