• 67% of over 50s now know annuities guarantee income for life, up from 49% last year
  • Awareness is rising around inflation protection alongside other flexible options
  • Confusion remains with only one-in-three knowing they can purchase an annuity later in life

Understanding of annuities among over 50s has risen sharply, with two-thirds (67%)1 now correctly identifying that annuities provide a guaranteed income for life, an 18% rise compared with 2024 (49%)2. The findings come from research from Standard Life, a retirement specialist focused entirely on retirement savings and income.

With annuity rates having strengthened in recent years, reaching 7.6% in March 20263, and the appeal of guaranteed income growing amid ongoing economic uncertainty, more people are revisiting annuities to secure long term financial certainty in retirement.

Awareness of key annuity features is improving. For example, the proportion recognising that some annuities can increase in line with inflation rose from 20% to 25%. Understanding of investment risk has also grown, with 40% now aware annuities carry no investment risk, compared to 34% in 2024.

Growing understanding of flexibility

Knowledge around product options and design features have also strengthened:

  • More over-50s now understand they do not need to use their full pension pot to purchase an annuity (37% in 2025 vs 31% in 2024)
  • Awareness that an annuity can provide an income over a spouse’s lifetime has increased (38% in 2025 vs 30% in 2024)
  • More people now recognise that annuities can be used alongside drawdown (35% in 2025 v 30% in 2024)

Pete Cowell, Head of Annuities at Standard Life, said: “More people approaching retirement now understand what annuities do best: provide a guaranteed income they can rely on. With cost of living pressures still front of mind, it’s encouraging to see growing awareness of inflation-linked options and how these can protect your income over time. This is reflected in the latest industry data which shows sales of escalating annuities up 10% in 20253.”

Persistent gaps in knowledge

Despite strong progress, several important aspects of annuities remain less widely understood.

  • An annuity doesn’t have to be bought at the point of retirement: Only 33% (31% in 2024) of people know that an annuity can be bought at any point in their retirement, with various amounts of money. In practice, some people choose to buy later and may benefit from higher rates as they age.
  • Having underlying medical or health conditions doesn’t mean you get worse rates: While many assume that health issues make insurance products more expensive, enhanced annuities can offer higher income to those with certain medical conditions or shorter life expectancy. Standard Life’s internal analysis shows customers could receive around 9% more income through underwriting. Yet just 22% of over 50s (18% in 2024) are aware that health conditions can improve the rate they receive.

Pete said, “Demand for annuities has continued to grow as more people balance flexibility with the comfort of guaranteed income. We’re also seeing some customers use annuities as part of broader estate planning, and our internal data shows around three-quarters of annuity purchases are now made with pension pots over £50,000, compared to 49% at the start of 2025.

“However, many people still value flexibility, and Government findings show that a significant proportion of those nearing State Pension age feel under prepared for the decisions ahead.4 This lack of confidence increases the risk of people drawing down savings too quickly or missing out on options that could provide greater stability later in life. As the retirement landscape continues to evolve, clear and accessible information about the role annuities can play will be essential to helping them make better decisions and achieve lasting financial security.”

-ENDS-

Notes to editors

[1]Research conducted by Opinium with a nationally representative sample of 2,000 UK adults aged 50 and over between 27 August and 1 September 2025. Participants were asked a series of true/false statements in relation to annuities.

[2] Comparison with research last year, commissioned by Standard Life and conducted by Opinium with a nationally representative sample of 2000 over 50 years old, between 25th July - 12th August 2024

[3] Standard Life Annuity Rate Tracker – April 2026

[4] Planning and Preparing for Later Life 2024 - GOV.UK

About Standard Life plc (‘Standard Life’)

  • Standard Life is a retirement specialist focused entirely on retirement saving and income.
  • We are proud to manage around c£317bn in assets on behalf of our 12 million customers, and we champion the belief that everyone's journey to and through retirement can be better.
  • With our focus entirely on retirement savings and income we want to be the business that people trust to guide their retirement journey, helping our customers achieve better outcomes and greater financial security in later life.
  • As a FTSE 100-listed group we are using our size, expertise and influence to shape the world our customers will retire into, and are committed to helping three million more customers by 2035, take action towards a better retirement.
  • Standard Life is a responsible investor with a clear commitment to supporting a more sustainable future. The Group has achieved its net zero goal across its emissions for 2025 and is working towards net zero investment portfolios by 2050 or sooner.
  • Standard Life is recognised as a leading employer, with long-standing accreditation as a Living Wage Employer, Living Pension Employer and Carer Positive Exemplary Employer and in 2025 became one of Britain’s Most Admired Companies in 2025.

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