Annuities are now firmly back on advisers’ radars, driven by improved rates and a renewed focus on income certainty in retirement. But while demand is rising, delivering annuity solutions is not always keeping pace. David Simpson, Head of EMEA, GBST, looks at how delays, manual processes and inconsistent service continue to create friction for advisers and their clients.
ABI figures released in February highlight the scale of renewed demand. Last year, the total value of premiums paid into individual pension annuities rose by 4% to £7.4bn, the highest annual level since 2014. The average annuity value also rose by 7% year-on-year to £84,000, exceeding £80,000 for the first time. In addition, the number of people over 70 buying an annuity increased by 8%, suggesting that later-life retirees are actively prioritising certainty, against a backdrop of policy changes around inherited pensions and IHT.
The gap between demand and delivery
Many annuity providers are not yet ready for this resurgence in demand. Higher volumes are exposing the constraints of legacy systems and manual onboarding processes, which were not designed for today’s advice-led, digital environment.
Advice firms recommending annuities for their clients shouldn’t have to accept overwhelmed providers and outdated infrastructure. Left unaddressed, this risks frustrating advisers and ultimately slowing adoption of what is often an important income solution for many clients.
If annuities are to retain their place as a credible retirement income option, a significant system overhaul is required.
Annuity providers looking to move beyond these constraints will need to rethink how their operating models support current demand. Where processes remain manual or fragmented, delays and poor visibility tend to follow, limiting the experience for advisers and clients, as well as constraining product innovation. As volumes rise, those inefficiencies become more pronounced.
This creates a practical barrier for advisers. Longer turnaround times, slow transfers and inconsistent processes can disrupt wider retirement planning conversations. In some cases, this introduces timing risk around market movements or interest rates, particularly where clients are weighing annuities against drawdown or other income options. It can also make it harder to recommend annuities within a broader strategy, even where they are clearly suitable.
For their part, clients are increasingly used to responsive, digital-first interactions with financial services and beyond. When annuity processes fall short of their expectations, it can undermine confidence at a point in the journey where reassurance and clarity matter most.
Greater transparency throughout the process is important. Being able to track applications, understand timescales and manage client expectations more effectively would remove much of the day-to-day friction advisers currently face. As annuities become more central to retirement planning again, the ability to process business efficiently becomes as important as product design itself.
What needs to change
Providers need to manage increased demand without adding friction. This is likely to require greater automation, more joined-up systems and clearer end-to-end processes. This can reduce operational pressure and free teams to focus on improving service and other areas that add value for advisers and clients.
It also creates more scope to develop new propositions that reflect how retirement planning is evolving. Rather than a single decision point, advisers are increasingly blending guaranteed income with drawdown, cashflow modelling and estate planning considerations. Annuities still have a clear role, but they need to fit more seamlessly into that wider framework.
The opportunity for providers is to reposition themselves as part of a smoother, more reliable advice journey, rather than a point of friction within it. For advisers, that translates into greater confidence in recommending annuities where appropriate and a better overall client experience.
Demand is returning, but expectations have moved on. Providers that can close that gap are likely to see the greatest benefit from the annuity revival.
[1] https://www.abi.org.uk/news/news-articles/2026/2/2026-annuity-data/
