Steve Butler, Managing Director at Pension Potential, is urging retirees to explore all their options before locking into a deal with their pension provider, as annuity rates reach their highest levels in over a decade.
A healthy 67-year-old with a £100,000 pension pot can now secure an annual annuity income of £7,795, up from £7,146 in January.*
Steve’s comments come as new figures from Just Group[i] show returns available to pension savers through guaranteed income for life solutions reached new highs in early 2025.
The gains were particularly marked for older buyers, as a healthy 70-year-old could now secure nearly 9 per cent guaranteed income returns, rising to around 10 per cent for a 75-year-old. Returns could be higher once lifestyle factors and health history were considered.
“Annuities are back – and in a big way,” says Butler. “We’re seeing the best returns for over a decade, but many people are still defaulting to whatever their pension provider offers – often without realising there are far better deals available elsewhere.”
“Annuities provide peace of mind with a guaranteed income for life or a set term, taking away the stress of managing your money in retirement. Bu the gap between the best and worst rates can be as much as 15%, and up to 80% if you qualify for an enhanced annuity. That could mean missing out on tens of thousands of pounds in income over your lifetime.”
Butler adds that this is particularly urgent for the “forgotten generation” – Gen Xers[ii] who are too young to have built up generous defined benefit pensions and too old to have benefitted fully from auto-enrolment – and often have only modest pension savings.
“If your pension pot is less than £100,000, making the right choice about how to turn it into income is absolutely critical. A poor decision could mean running out of money too soon, or being stuck with a lower income for life,” he adds. “That’s why shopping around the whole market is essential, rather than just accepting the first quote you’re given.”
Butler encourages retirees to take advantage of free tools like Pension Potential’s live annuity quote service, which lets people compare personalised offers based on their age, health, and lifestyle factors.
“We’re seeing huge differences in what people are being offered,” Butler explains. “With rates changing daily and personal factors playing a major role, checking live quotes is essential. The days of ‘one-size-fits-all’ annuities are long gone.”
“Technology has made it easier than ever to compare annuity rates. A few minutes of searching could add thousands to your retirement income. Don’t rush. Do your homework. Use the tools and support available to you – because this is one of the most important financial decisions you’ll ever make.”
*Quote generated by Pension Potential on 27 May 2025 for a £100,000 single-life annuity for an individual aged 67 in good health. Rates vary daily.
For more information visit: www.pensionpotential.co.uk.
