Current annuity rates, and what actually sets your income

We publish no rate, and that is deliberate. Annuity rates are set by providers daily against gilt yields and against your own age, health, postcode and the options you choose, and no public source sets a market rate; a figure on a page like this would look authoritative and mislead. What can be set out usefully is what moves a quote and by how much in each direction, which is what this site does, and then you get real quotes from providers.

Providers back annuity promises largely with government bonds, so what they can offer follows gilt yields, which move with interest rate expectations. Bank Rate itself has moved recently, from 4.25% in May 2025 to 4.00% in August and 3.75% from 18 December 2025. This is why annuity quotes have a short shelf life and why one given weeks ago may no longer stand.

One that pays a higher income because your health or lifestyle suggests a shorter than average life expectancy. It can increase the income materially, and the crucial point is that a provider cannot offer an enhancement for something it was never told about. Complete the medical and lifestyle questionnaire fully, including conditions you would not think of as serious, because this is the step most often skipped and the one with the largest effect for those it applies to.

That depends entirely on what happens to your household if you die first, and it is a question to take advice on rather than one this page can answer. A joint life annuity continues paying a proportion to a spouse or partner and starts lower because the income must last two lives. If the survivor has adequate income of their own the calculation looks different from a household where they do not.

Neither is a safe default and there is no general answer. A level annuity pays the same amount forever so its purchasing power falls; an index linked one starts substantially lower and rises. The point at which the escalating annuity has paid more in total depends on how long you live and on inflation, so a level annuity is effectively a bet on a short retirement or low inflation and an escalating one is a bet against both.

Generally no. Almost every choice, single or joint life, level or escalating, guarantee period and value protection, is fixed permanently at purchase. That is what makes an annuity unlike most retail financial products, where a poor decision can be unwound at a cost, and it is the reason to use the free government-backed guidance and, where the sums matter, regulated advice, before you commit rather than after.

Pension income above your Personal Allowance is subject to Income Tax, and gov.uk warns that taking a large amount from a private pension can mean paying at a higher rate. Income Tax also applies to any part of a lump sum above your lump sum allowance or your lump sum and death benefit allowance. The amounts of those allowances and how they apply to you are matters for gov.uk and for a qualified adviser rather than for this page.

Get other quotes before deciding. Your existing provider is under no obligation to offer you the best available annuity and frequently does not, and exercising the open market option costs nothing. When you compare, compare like with like: the same options, escalation and guarantee period. Setting a level single life quote against a joint life escalating one is the most common false comparison in this market and it makes the worse product look better.