Answers · UK 2025/26

How much annuity income would a £100,000 pension buy in the UK?

Around £7,000-£7,500 a year before tax at age 65 for a single, level lifetime annuity in 2026/27, based on typical rates of about 7%-7.5%. Adding inflation protection or a spouse's pension cuts the starting income, often to £4,500-£5,500. Rates vary by provider and health.

Last updated: 10 June 2026Last reviewed: 10 June 2026How we verify

Full answer

Annuity income depends on your age, health, the options you choose and prevailing rates, so treat any figure as an estimate. For 2026/27, a healthy 65-year-old buying a single-life, level (non-increasing) lifetime annuity with £100,000 might get roughly £7,000-£7,500 a year before tax, equal to an annuity rate near 7%-7.5%. Worked example: you have a £100,000 pension pot. You first take 25% (£25,000) as tax-free cash, leaving £75,000 to annuitise. At a 7.2% rate that buys about £5,400 a year for life, taxed as income. If you instead annuitise the full £100,000 you might get about £7,200 a year, but you give up the tax-free cash. Choosing RPI-linked increases or a 50% spouse's pension typically lowers the starting income by 30%-40%, so the same pot might start at only £4,500-£5,000. Annuity income counts as taxable income: combined with the full new State Pension of £12,548 a year, a £5,400 annuity keeps you within the £12,570 Personal Allowance with little or no tax. Enhanced annuities pay more if you smoke or have medical conditions, so always shop around. Use the pension calculator to compare drawdown against annuity outcomes for your pot. For impartial guidance see Pension Wise and gov.uk at https://www.gov.uk/guaranteed-income-annuities.