{"id":399371,"date":"2026-04-15T07:52:12","date_gmt":"2026-04-15T07:52:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/399371\/"},"modified":"2026-04-15T07:52:12","modified_gmt":"2026-04-15T07:52:12","slug":"pension-annuity-buyers-breaking-even-seven-years-sooner-as-rates-surge-to-17-year-high","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/399371\/","title":{"rendered":"Pension annuity buyers breaking even seven years sooner as rates surge to 17-year high"},"content":{"rendered":"

Pensioners purchasing annuities are now recovering their initial investment seven years sooner than they would have done five years ago.<\/p>\n

A typical 65-year-old investing \u00a3100,000 in an annuity can now break even after 14 years, data from Canada Life shows.<\/p>\n

In 2021, the same investment would have taken 21 years to return its original value.<\/p>\n

The improvement follows a sharp rise in annuity rates, which reached their highest level in 17 years during 2025.<\/p>\n

A healthy 65-year-old investing \u00a3100,000 into a single-life annuity now receives \u00a37,373 per year.<\/p>\n

This compares with \u00a34,662 five years earlier, reducing the break-even period by around one third.<\/p>\n

The increase in returns has been driven by higher interest rates over the past three years.<\/p>\n

Rising rates have pushed up yields on British Government bonds, with annuity pricing closely linked to gilt performance.<\/p>\n

\"Pensioner\"\/<\/p>\n

Pensioners break even sooner as returns hit 17-year high<\/p>\n

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GETTY<\/p>\n

Across the market, the average annual annuity income reached \u00a33,558 last month.<\/p>\n

This represents an increase of \u00a360 compared with March 2025, according to Moneyfacts.<\/p>\n

Demand for annuities has also increased alongside improved rates.<\/p>\n

Financial Conduct Authority (FCA) data shows annuity sales rose 29 per cent between 2021-22 and 2024-25.<\/p>\n

\"StateAre you affected by state pension age changes? | GETTY<\/p>\n

The number of pension pots converted into annuities at first access increased from 68,514 in 2021-22 to 88,430 in 2024-25.<\/p>\n

Annuities provide a guaranteed income for life, with options available for payments to rise in line with inflation.<\/p>\n

Policy changes have also contributed to renewed interest.<\/p>\n

Labour has confirmed that unspent pension savings will fall within the scope of inheritance tax from April 2027.<\/p>\n

This has prompted some retirees to consider annuities as part of estate planning.<\/p>\n

Money used to purchase an annuity is removed from a pension pot, meaning it no longer forms part of an individual\u2019s estate for inheritance tax purposes.<\/p>\n

This can reduce the overall value of an estate and the potential tax liability for beneficiaries.<\/p>\n

Nick Flynn, retirement income director at Canada Life, said: “Attractive pricing and the certainty of a guaranteed income for life are increasingly valuable as people live longer and face extended retirements, making annuities a strong choice for those seeking financial stability and peace of mind.”<\/p>\n

\"Pensioner\"\/<\/p>\n

A 65-year-old woman can expect to live a further 23 years on average<\/p>\n

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GETTY<\/p>\n

Rachel Springall, finance expert at Moneyfacts, said: “Higher interest rates and higher gilt yields have pushed up annuity incomes, making them more attractive to retirement savers than they were even just a few years ago.”<\/p>\n

She added: “The case to take one out has become even stronger now, particularly as unused pension pots will fall under inheritance from April 2027.<\/p>\n

“Using part of a pension to buy an annuity can reduce the value of an estate, which means someone’s bereaved relatives would pay less inheritance tax.”<\/p>\n

Office for National Statistics (ONS) data shows a 65-year-old woman can expect to live a further 23 years on average.<\/p>\n

Men of the same age are expected to live for around 20 more years.<\/p>\n","protected":false},"excerpt":{"rendered":"Pensioners purchasing annuities are now recovering their initial investment seven years sooner than they would have done five…\n","protected":false},"author":2,"featured_media":399372,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,1087,43,1558,174,175,2987,40822],"class_list":{"0":"post-399371","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-ie","11":"tag-ireland","12":"tag-money","13":"tag-news","14":"tag-pensions","15":"tag-personal-finance","16":"tag-personalfinance","17":"tag-savings","18":"tag-sgg"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/399371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=399371"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/399371\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/399372"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=399371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=399371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=399371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}