The average annual annuity income has increased by more than £100 since March 2026, driven by wider market unrest, research from Moneyfactscompare.co.uk has revealed.

The analysis highlighted that annual annuity income, based on a £50,000 purchase price, has risen by £106 in less than six months, increasing from £3,547 at the start of March 2026 to £3,653 at the start of August 2026.

Moneyfactscompare.co.uk finance expert, Rachel Springall, noted that rising long-term gilt yields were affecting annuity rate pricing.

Yields have increased in recent months amid prolonged conflict in the Middle East and political unrest.

“Ten-year gilts have breached 5 per cent on a few occasions during 2026 and remain higher than the start of the year. It is entirely plausible for further volatility to affect long-term gilts, particularly surrounding the Autumn Budget,” she added.

Springall also suggested that annuities could see a resurgence in popularity over the next couple of years, as they can help reduce the overall value of an estate, with unused pension pots becoming subject to inheritance tax from April 2027.

Signs of renewed interest were already emerging, with analysis from the Association of British Insurers showing that the total value of premiums paid into individual pension annuities increased by 4 per cent to £7.4bn in 2025 – the highest annual level since pension freedoms were announced in 2014.

The rise in annuity rates has also been highlighted by Standard Life’s recent Annuity Rate Tracker, which found that rates reached 7.75 per cent in July 2026, the highest level in 18 years.

It also showed that the average annuity rate for a healthy 65-year-old increased from 7.66 per cent in April to 7.75 per cent in July.

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