Retirees flock to annuities as guaranteed payouts surge with higher gilt yields

Rising gilt yields have driven up annuity rates, prompting a noticeable uptick in retiree demand, according to Hargreaves Lansdown. Their annuity portal shows a 65-year-old with a £100,000 pension could secure up to £8,061 per year from a single-life annuity with a five-year guarantee, more than 60% higher than five years prior. The company stresses the importance of researching annuity products, as they cannot be reversed, and suggests considering joint-life options to safeguard a spouse’s income.

It also recommends against allocating the entire pension to a single annuity, advocating for phased purchases to match evolving needs. Additionally, the FCA notes a 7.4% rise in first-time pension plan accesses, with roughly 30% of those users receiving regulated advice, a proportion similar to the previous year.