Wealth ManagementPersonal Finance

Should You Buy an Annuity Now?

Investors’ Chronicle
Investors’ Chronicle•Mar 30, 2026

Why It Matters

Choosing the appropriate annuity strategy can lock in reliable income, protect against inflation, and preserve estate value, directly impacting retirees’ financial security.

Key Takeaways

  • •Annuities offer guaranteed lifetime income but lack flexibility.
  • •Current annuity rates remain flat despite recent bond yield increases.
  • •Disclosing health conditions can secure higher enhanced annuity payouts.
  • •Joint and value‑protection annuities address survivor income and legacy concerns.
  • •Hybrid strategies combine annuity stability with draw‑down inflation protection.

Summary

Retirement advisers are revisiting annuities as a potential source of stability after years of low bond yields. The discussion centers on whether now is a good time to lock a pension pot into a guaranteed income product, given recent shifts in the bond market and the availability of alternative draw‑down strategies.

An annuity is an insurance contract that converts a lump‑sum pension into a lifelong payment, contrasting with draw‑down where retirees keep investments flexible. While higher bond yields typically lift annuity payouts, rates have barely moved; a 65‑year‑old buying a £100,000 annuity would receive about £7,800 annually today, only slightly less than a few months ago.

Experts stress that health disclosures can unlock enhanced annuities, with two‑thirds of buyers potentially qualifying for better rates. Joint annuities offer survivor income and future inheritance‑tax relief, while value‑protection annuities return the remaining capital to beneficiaries, though only 7% of recent sales include this feature. Inflation‑linked options exist but carry higher costs, prompting many to consider a hybrid of partial annuity and remaining draw‑down.

For most retirees, the decision hinges on balancing certainty against flexibility. Monitoring bond‑yield trends, disclosing health conditions, and evaluating hybrid structures can preserve purchasing power while mitigating the risk of outliving assets. The right mix can provide peace of mind without sacrificing growth potential.

Original Description

Are annuities worth considering again?
After years of poor value, rising interest rates have made annuities more attractive — offering retirees a guaranteed income for life. But they come with trade-offs, including a lack of flexibility and no access to your capital once you commit.
In this video, Holly McKechnie joins Dan Jones to explain how annuities work, how they compare to drawdown, and what to watch out for — from enhanced rates based on health to options like joint and value protection annuities. We also explore hybrid strategies that combine security with investment growth.
Read more here:
When (and when not) to buy an annuity
#Annuities #Retirement #Pensions #Investing #finance #personalfinance #investments #business
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