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Over-50s are missing out on up to £7,836 a year boost because they don’t know about it. M illions of over 50s could be missing out on thousands of pounds in guaranteed retirement income each year, it has been warned. A Hargreaves Lansdown annuity comparison service shows that a 65-year-old with a £100,000 pension could get up to £7,836 a year with a single life level annuity offering a five-year guarantee. But while annuity sales have climbed 34 per cent to £7billion in 2024, most people over 50 still do not understand how they work or how they could help them achieve the lifestyle they want in retirement. READ MORE Rachel Reeves 'looking at' pay-per-mile car tax for 1.3 million drivers Around 35 per cent of over 50s want a “steady and stable” income but do not recognise annuities as a way to achieve it. Over half of women, at 52 per cent, said they prioritised “comfort and freedom” in retirement compared with 46 per cent of men, yet few realised annuities could provide that same sense of security. Only 13 per cent of women understood that annuities can include inflation protection, compared with 26 per cent of men, showing a clear knowledge gap that leaves many financially vulnerable. Steve Butler, Managing Director of Pension Potential and founder of National Annuity Day, said: “The survey highlights a clear mismatch between what people want in retirement and what they understand about how to achieve it. “Many over 50s are seeking comfort, stability and predictability, exactly what annuities are designed to provide, but their understanding of these products is low. “This lack of knowledge, particularly amongst women, risks people missing out on the financial security they want. National Annuity Day aims to close these knowledge gaps and help people make informed, confident decisions about their future.” Hargreaves Lansdown head of retirement analysis, Helen Morrissey, highlighted the trend as an indication that the values on offer are appealing to a greater range of people, arguing that this "flies in the face of the idea that people with bigger pension pots opt for income drawdown". Ms Morrissey said the reason for the rise in annuity purchases was “easy” to see when considering market trends over the past few years, pointing out that annuity rates have "boomed" off the back of soaring interest rates and high gilt yields. "The most recent data from HL’s annuity comparison service shows a 65-year-old with a £100,000 pension can get up to £7,793 per year with a single life level annuity with a five-year guarantee," she explained. "This is close to all-time highs and a vast improvement on the £4,943 available in August 2021." Given this, she explained that people seeking some guaranteed income are increasingly choosing to “lock in”. However, she admitted that the irreversible nature of annuity purchases means product choice remains critical, stressing the need for savers to do research.
