The average value of an annuity has soared 160% since 2021, according to newly-published client data from Hargreaves Lansdown.
The data shows that in the first six months of 2025 the average fund used to purchase an annuity was £162,729.
That is up from the £62,301 recorded in the first six months of 2021 by the firm.
The most recent data from the HL annuity comparison service showed that a 65-year-old with a £100,000 pension could get up to £7,793 per year with a single life level annuity with a five-year guarantee.
That is close to all-time highs and a notable improvement on the £4,943 available in August 2021.
The company said 2024 was the best year for annuities since before pension freedom and choice was introduced, with 2025 looking set to build on that.
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: “The figures indicate that the values on offer are appealing to a greater range of people and flies in the face of the idea that people with bigger pension pots opt for income drawdown.”
She said it's easy to see why this is happening when you look at the market over the last few years. “
Annuity rates have boomed off the back of soaring interest rates and high gilt yields. Even recent decisions from the Bank of England to cut interest rates haven’t really put a dent in the incomes on offer.”
She said people on the look out for an element of guaranteed income in their retirement planning are deciding now is the time to lock in.
In June figures showed that annuity rates reached 7.72% for a healthy 65-year-old, up 64% since July 2020 when rates stood at just 4.71%.
Figures from the Standard Life Annuity Rates Tracker also showed that rates were up 10.2% compared to May 2024, when the average annuity rate stood at approximately 7%.
A third (33%) of annuity buyers failed to compare rates from two or more providers before purchasing, according to a recent report from retirement consultancy Just.
One in three adults (35%) aged 50 and over bought their annuity from the same provider they saved with while a further 12% of those surveyed were not sure if they had compared annuity rates or used their savings provider or not.