Are annuity rates going up? Nobody can know the next move, but rates tend to follow gilt yields and interest rates, which the Bank of England publishes.

If you are asking whether annuity rates are going up, the honest answer is that no one can tell you in advance. What follows sets out what moves an insurer's offer, which way those forces have tended to push it, where the Bank of England publishes the data, and how to see your own rate.

Pension Wise, MoneyHelper's guidance service on taking a defined contribution pension, is, MoneyHelper says, free and impartial as well as backed by the government. If you would sooner go through your own health, pots and timing with someone, the form on this page lets an FCA-authorised adviser ring you, at no cost.

Why nobody can tell you where annuity rates are heading

An annuity rate is what an insurer offers you on the day, so it is only ever a snapshot. MoneyHelper says its comparison tool shows what providers would pay "as rates often change". Any forecast of where they go next is an opinion, not a published fact.

What the official sources do give is what the offer depends on, which is more use than a prediction: some of it is the market, and much of it is you. Past decades of rate moves are traced in UK annuity rates through history, and the income a particular pot might buy in how much annuity income a pot gives.

What annuity rates follow: interest rates, gilts and you

MoneyHelper splits the rate a provider offers into two kinds of input: "your age, health and where you plan to live", and "the current interest rates and other market factors." GOV.UK's list for the insurer's calculation also names "interest rates", beside age, gender, pot size and sometimes health.

So two strands are at work. One is the market, which moves for everyone at once. The other is how long the insurer expects to pay you, which is personal. Your health, for example, can change the offer, as enhanced annuity rates explains, and so can the features you choose: an income that rises each year starts lower than a level one, covered in inflation-linked annuity rates.

How closely do annuity rates follow gilt yields and interest rates?

Gilts are UK government bonds, and the FCA ties annuity rates to them. Looking back at the low interest rate environment since 2008, its retirement income advice review of March 2024 says: "Lower interest rates have impacted returns from government bonds which affect annuity rates." Its retirement income market study (interim report, December 2014) put it more fully: "The annuity payments consumers receive depend heavily on two factors: interest rates and mortality assumptions", using government bond yields "as a proxy" for interest rates.

Read together, those point one way, as a tendency rather than a rule: when gilt yields rise, annuity rates have tended to rise with them, and when yields fall, annuity rates have tended to fall. The 2014 analysis is dated, but it shows why the link is loose: by then, the FCA found, very low interest rates and rising life expectancy "have both pushed annuity rates down". Life expectancy can pull against yields, and your own details sit on top, so a move in gilts is not a matching move in your quote.

Where to see the official interest rate and gilt data

The Bank of England publishes all three:

  • Bank Rate. The Bank's Interest rates and Bank Rate page shows the current rate and the date of the next decision.
  • Gilt yields. The Bank's yield curves page says it "publishes daily estimated yield curves for the UK", including "A set based on yields on UK government bonds (also known as gilts)."
  • The statistical database. The Bank of England Database lets you browse, visualise and export the data series the Bank publishes.

These show what interest rates and gilt yields are doing, not what an insurer will offer you.

Waiting: the trade-offs

Many people wonder whether to wait for better rates. Whether to wait is personal, but some things hold whichever way the market goes:

  • The offer on the day is the one you keep. Once the cooling-off period is over, MoneyHelper says, you typically cannot change your mind, so the rate you accept is the one you live with.
  • You need not buy all at once. You can use part of a pot for an annuity now and keep the rest invested for a later purchase. That is a choice about the pot, not a bet on rates.
  • Later means a different age and a different market. Writing about buying again when a fixed-term annuity ends, the same guide says an older age and health may mean a higher income, "but it all depends on the rates available at the time." Any later purchase faces the same mix, and rates can have moved either way.
  • Money kept invested has its own risk. If you keep the pot invested while you wait, for example in drawdown, its value can fall as well as rise and you may get back less than was paid in.

The wider question of whether an annuity suits you at all is in is an annuity worth it, and timing by age in the best age to buy an annuity. If you hold an older policy, check first for a guaranteed annuity rate, which sits outside today's market. Whether waiting makes sense turns on your health, your other income and what the pot is for. If you would like those weighed with an FCA-authorised adviser, a short form on this page asks for the call.

How to see today's annuity rate for your own pot

The market data above cannot tell you your own rate; a quote can, and quotes from several insurers show how far offers differ on the same day. Your pension provider is not the only place to buy, and MoneyHelper runs a comparison tool. Quotes compare fairly only when each is for the same pot, income shape and protections, after the same health questions.

How shopping around works is in the pension annuity guide, costs around the purchase in annuity fees, the wider choices in your defined contribution options, and help that costs nothing in free annuity advice.

Annuity rate questions people ask

Are annuity rates linked to the Bank of England base rate?

Only indirectly. The Bank says Bank Rate "affects other interest rates in the economy", while the FCA links annuity rates to returns from government bonds, so a Bank Rate decision is not itself a change in annuity rates.

Why have annuity rates gone up, and are they still rising?

After low interest rates since 2008 had weighed on annuity rates, the FCA wrote in March 2024 that "recent changes in economic conditions have led to higher rates which may lead to more consumers buying annuities". Whether that continues cannot be known in advance; the long run is in UK annuity rates through history.

If rates rise after I buy, does my annuity pay more?

Not because of the market. An annuity gives a guaranteed retirement income, so you can be sure how much you will get and how often; the income moves only as its own terms say, such as a yearly increase chosen at the start, as inflation-linked annuities explains.

Is there an annuity rate forecast or tracker?

A forecast is only an opinion, as above. To follow the drivers, the Bank of England aims to publish each day's yield curves "by noon on the following business day"; to follow what providers would pay, MoneyHelper's comparison tool shows current offers.

What interest rate does an annuity pay?

An annuity is quoted as an annuity rate: the yearly income as a share of the money you convert, not interest on a balance. What rate you are offered depends on the factors above.

Your next step

Annuity rates tend to move with gilt yields and interest rates, then shift again with your age, health and choices; where the market goes next nobody knows, but the offer for you today can be seen. For free guidance first, there is Pension Wise. When you want timing and choices talked through for your own circumstances, complete the form on this page to have an FCA-authorised adviser ring you.

Sources: MoneyHelper, annuities explained (archived copy, accessed 18 October 2026); GOV.UK, Personal pensions; FCA, TR24/1 Retirement income advice thematic review, March 2024; FCA, MS14/3.2 Retirement income market study: interim report, December 2014; Bank of England, Bank Rate, yield curves and database (accessed 18 October 2026).