Annuity rates hit a record for the decade – is now a good time to buy an annuity?

Annuity rates have increased 10% since May 2024, part of an upward trend, while sales of the pension product are also soaring. Should you buy an annuity?

Pensions signpost showing different options, including annuity, do nothing and take cash
Annuity rates are soaring: should you buy an annuity with your pension pot?
(Image credit: © Getty Images)

Annuity rates have surged above 7.7%, the highest point of the decade. The figures, for May 2025, mark a 10% increase on a year ago, in an ongoing upward trend of annuity rates.

This marks a significant recovery from July 2020 when rates were just 4.71%, reflecting a 64% increase since then.

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Annuity rates are closely linked to government bond (gilt) yields, which surged to their highest level since 2008 in January.

Ruth Emery
Contributing editor

Ruth is an award-winning financial journalist with more than 15 years' experience of working on national newspapers, websites and specialist magazines.

She is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times. 

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service. 

Outside of work, she is a mum to two young children, while also serving as a magistrate and an NHS volunteer.