Annuity Calculator UK 2026/27

Based on April 2026 market data: a healthy 65-year-old buying a level single-life annuity with £100,000 can expect approximately £6,800–£7,630 per year from leading providers. Canada Life's best rate was 7.63% at 1 April 2026 (source: Retirement Line). Scottish Widows led on joint life 50% at 7.66% and joint life 100% at 7.08%. A 70-year-old can expect approximately £8,150+. Those with qualifying health conditions can receive 15–50% more through enhanced annuities.

Rates change daily with gilt yields and base rates. These figures represent the best available — many people receive lower rates by not using the Open Market Option. Always get quotes from multiple providers before purchasing.

An enhanced (impaired life) annuity pays higher income to people whose life expectancy is reduced by health conditions or lifestyle. The insurer pays more because they expect to pay for a shorter period. Qualifying conditions include: type 2 diabetes, high blood pressure (even controlled), heart disease, stroke, cancer, COPD, kidney disease, obesity (BMI 35+), smoking, and heavy drinking. Even mild conditions can qualify.

Enhancement typically ranges from 15–50% above standard rates. On a £100,000 pot at age 65, a serious condition could mean £9,000–£11,500+ per year instead of £6,800–£7,630. It is always worth declaring all health information. Providers are required to ask, and disclosing health issues can only improve your rate — never reduce it. Even if you "feel fine" on medication, that medication itself can be a qualifying factor.

A level annuity pays the same every year — highest starting income but loses purchasing power to inflation. At 3% inflation, £7,000/year today buys the equivalent of only £5,188 of today's goods in 10 years and £3,862 in 20 years. An escalating annuity starts lower but grows — a 3% escalating annuity typically overtakes the cumulative total of a level annuity after 14–16 years.

For a 65-year-old, the break-even is approximately age 79–81. Given average UK life expectancy at 65 is approximately 84 (men) and 87 (women), the majority of retirees in reasonable health will live past the break-even. However, if you have other inflation-linked income (State Pension, defined benefit pension) and only need a fixed supplement, a level annuity offers more income in the years when you're most active. This is a highly personal decision. Consider consulting a regulated financial adviser.

The Open Market Option (OMO) is your legal right to buy an annuity from any UK provider, not just the one managing your pension pot. Annuity rates vary significantly between insurers — shopping around typically generates 10–20% more annual income on the same pot. On a £200,000 pot, a 15% better rate means an extra £1,500–£2,000 per year for life. Over 20 years that's £30,000–£40,000 of additional income — for simply taking the time to compare.

Despite this, many people accept the first annuity they are offered because the process feels complex. Free tools including MoneyHelper's annuity comparison, Hargreaves Lansdown's annuity search, and specialist brokers like Retirement Line make comparison straightforward. Alternatively, an FCA-regulated financial adviser can manage the process and will often identify enhanced annuity eligibility that significantly increases your final rate.

Yes. You do not have to use your entire pension pot for an annuity. A popular strategy called a "partial annuity" or "hybrid approach" uses part of the pot to buy a guaranteed income annuity — typically enough to cover essential living costs — while keeping the remainder in flexible drawdown for discretionary spending, emergency access, and investment growth potential.

For example: a £400,000 pot might be split so £150,000 buys an annuity (generating approximately £10,000–£11,000/year guaranteed income to supplement the State Pension) while £250,000 remains in drawdown for flexibility. This approach balances longevity protection with investment upside and inheritance. Use our Pension Drawdown Calculator alongside this annuity calculator to model both components.

No. Purchasing a standard lifetime annuity does NOT trigger the Money Purchase Annual Allowance (MPAA). You can continue contributing up to £60,000 per year to other defined contribution pensions (SIPP, workplace pension) after buying an annuity. The MPAA of £10,000 is only triggered by taking taxable income from flexi-access drawdown or by taking an UFPLS.

This distinction matters for people who retire partially — for example, working 3 days a week while buying an annuity to supplement income. They can buy the annuity without reducing their ability to contribute to a SIPP or workplace pension. For more on the MPAA and contribution limits, use our Pension Tax Calculator.

This depends entirely on the options you chose at purchase. A single life, no-guarantee annuity pays nothing to your estate on death — payments stop immediately. A joint life annuity continues paying 50% or 100% of the original income to your named beneficiary (usually a spouse or partner) for their lifetime. A guarantee period ensures payments continue for the remaining guarantee years to your estate if you die early.

Some annuities also offer a "value protection" option — if you die early, a lump sum (typically the purchase price minus income already received) is paid to your estate. This reduces the starting income but prevents the insurer from retaining the full capital if you die young. Discuss these options carefully at the point of purchase, as they cannot be changed afterwards.