Standard Life: Average annuity rates increase by 6.5% in the last twelve months, adding over £9,400 to lifetime income

by | Mar 30, 2024

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·       The Standard Life Annuity Rate Tracker reveals that average rates have increased by c6.5% since February 2023

·       This has added £9,430 and £9,750 to the total lifetime income expected for a healthy 65-year-old man and woman respectively

·       Average rates in February for a healthy 65-year-old were c6.89%


Annuity rates have increased by 6.5% since February 2023 for a healthy 65-year-old, according to the Standard Life Annuity Rates Tracker. This has added £9,424 and £9,740 to the total lifetime income expected for a 65-year-old man and woman respectively.  

This increase means that a 65-year-old looking to annuitise in recent weeks could expect to receive an annual income of £6,890 based on a £100,000 pension pot, an increase of £440 compared to February 2023.

Annual rates and annual income (2023 – 2024)
Average annuity rate (Feb 2024)Average annuity rate (Feb 2023)% change in rates over last 12 monthsAnnual incomeAnnual income difference

About the Annuity Rate Tracker


The Tracker, developed by Standard Life, part of Phoenix Group, monitors current average annuity rates across the market for those annuitising at ages 60, 65, and 70. It also shows the total lifetime income from an annuity and the extent to which annuity rates improve with age.

This latest Annuity Rate Tracker reveals that while there was a small drop in rates towards the end of 2023, following a decrease in yields, annuity rates are again trending upwards, with a percentage increase in rates of c.3% between December 2023 and February 2024

Annuity rates – November 2023 – February 2024
 Average annuity rate (Nov 2023)Average annuity rate (Dec 2023)Average annuity rate (Jan 2024)Average annuity rate (Feb 2024)

Total lifetime income


The Tracker found that the total expected lifetime income for a healthy 65-year-old male who purchased an annuity in February 2024 at a rate of 6.89% was £138,400 and the equivalent figure for a female was £153,550.

Meanwhile, a healthy 70-year-old who bought an annuity in February 2024 could expect a rate of 7.71%. For a man, this would provide a total lifetime income of £122,580, while a woman could receive £138,000.

Total expected income February 2024 – 2023 – male*
 Total expected income (Feb 2024)Total expected income (Feb 2023)Total expected income difference 
Total expected income February 2024 – 2023 – female*
 Total expected income  (Feb 2024)Total expected income (Feb 2023)Total expected income difference 

*Total expected income figure based on life expectancy statistics from the Office of National Statistics, are based on age annuity is first purchased. Total expected income includes annuity income only. 

Improving rates with age

While purchasing an annuity earlier in retirement will result in higher income overall, annuity rates also increase with age. This means that those who decide to purchase one later in their retirement are likely to benefit from higher rates.

As of the end of February 2024, rates for a healthy 60-year-old were 6.26%, compared to 7.71% for a healthy 70-year-old. This results in an annual income of £6,260 for a 60-year-old versus £7,710 a healthy 70-year-old might expect to receive on a £100,000 pension pot, a difference of £1,450.

Average historic annuity rates for a healthy 60, 65, 70-year-old

Graph shows the increase in annuity rates since the start of 2020, split by ages 60, 65, and 70, as at January 2024

Pete Cowell, Head of Annuities at Standard Life, part of Phoenix Group, said: “Our latest Annuity Rate Tracker shows that rates continued to improve throughout 2023, giving people more for their money than before. While movement in rates can be expected, with fluctuations observed during the fourth quarter of 2023, what’s important to note is that we are unlikely to see rates fall to the historic lows seen previously.

“The security and certainty that annuities provide is something we know people prioritise, with 9 in 10 saying income certainty in retirement is important to them. This increasing desire for a guaranteed income in retirement was also demonstrated in the ABI’s latest annuity data which demonstrated that the annuity market increased by 46% in 2023.

“When considering how best to manage your retirement income, what is important to remember is that this doesn’t have to follow a ‘one and done’ approach.  A blended approach can often give people the best of both worlds, and an annuity can play a valuable role as part of a wider toolkit of solutions. So rather than asking themselves whether they should annuitise or not, people may be better asking how much they should annuitise and when, especially when considering the fact that annuity rates improve with age.”

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