• Growing share of annuity quotes coming from customers aged over 75
  • Share of annuity quotes over £1m more than doubles since 2024
  • Forthcoming inclusion of pensions within IHT a driver of customer behaviour

Standard Life is seeing a shift in the profile of annuity demand, with both the proportion of older customers and larger case sizes increasing.

The proportion of quotes for customers aged over 75 has more than quadrupled since 2024, rising from 1.3% to 5.5% year-to-date in 2026. At the same time, Standard Life has seen an increase in the number of higher value cases, with the proportion of quotes over £1 million more than doubling over the same period.

This trend is being driven by a combination of attractive annuity rates and the income certainty they offer, but Standard Life believes Inheritance Tax (IHT) planning considerations are also playing an increasingly important role.

The inclusion of pensions within IHT from April 2027 has turned financial plans on their heads for wealthier individuals. Since the pension freedoms were introduced, financial advisers have typically recommended that wealthier clients should leave pensions untouched for as long as possible, as they could be passed on in a tax efficient way. However, given an estimated 10,500 estates1will be brought into paying IHT due to the change next year, with around 38,500 estates facing higher IHT bills than under previous rules, advisers and their clients are looking for ways to reduce their potential tax liabilities.

Annuities are one of several options open to advisers and their clients as a purchase reduces the value of the individual’s estate. The income they produce can either be enjoyed by the client or gifted, potentially under the gifts from surplus income rules. Options such as value protection or spousal benefits can be selected to ensure that should the client pass away earlier than expected, the annuity will continue to pay out.

Standard Life research2 has shown that 39% of financial advisers expect annuities to become more popular due to the changes, and this trend is reflected in the size of annuities Standard Life is writing. The average annuity premium is up 14% year-on-year, increasing from around £91,000 in 2025 to over £100,000 so far in 20263.

Demand has also been supported by ongoing enhancements to the customer journey. Last year, Standard Life introduced an industry-first, fully digital, signature-free annuity application process. In addition, Standard Life customers can access the Annuity Desk, where they receive whole-of-market comparisons and tailored guidance to help them make their decisions about what to do at retirement.

Pete Cowell, Head of Annuities at Standard Life, said: “We’re seeing growing demand from older customers as well as an uplift in larger annuity cases, reflecting how retirement needs and planning behaviours are evolving. The forthcoming inclusion of pensions within Inheritance Tax is prompting many to revisit how they use their pension savings, and annuities are one of a number of options available.

“While multi-million-pound annuities are still a minority purchase, the market is experiencing strong demand due to the combination of income certainty and attractive rates. Rates are currently at historically strong levels, reaching post-pension freedoms highs in May.”

 

Notes to editors:

1)Inheritance Tax — unused pension funds and death benefits - GOV.UK

2)Research conducted by Opinium on behalf of Standard Life from 5 – 12th November, with 200 IFAs.

3)Internal Standard Life data


About 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. 

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