As a means of drawing income in retirement, annuities have made a comeback — and for good reasons.
Annuity sales reached £7.4 billion in 2025 — £0.5 billion more than in 2014. Key trends include a 31% rise in sales above £250,000 and an 8% rise in sales to those aged 70 and older.
The jump in higher value sales may reflect planning ahead of the proposed changes to bring unused pension pots into the ambit of inheritance tax from April 2027. For a 65-year-old, annuity income could currently start at over 5.25% and rise with RPI each year.
Tax treatment varies according to individual circumstances and is subject to change.
