How much annuity income does £100,000 buy?

At indicative market-average rates, a £100,000 pot buys roughly £6,300-£7,100 a year of level, single-life income at ages 60-65, and more at older ages. Index-linking, spouse provision and guarantees all reduce the starting income; enhanced (health-based) rates increase it. Real quotes vary by provider and change with gilt yields.

Is annuity income taxable?

Yes - annuity income is taxable as income, like pension drawdown or the State Pension. You can normally still take 25% of the pot as a tax-free lump sum before buying the annuity with the rest.

Annuity or drawdown - which is better?

They answer different needs: an annuity buys certainty (guaranteed income for life, no investment risk, but inflexible and usually nothing to your estate), drawdown keeps flexibility and any remainder for your estate but can run out. Many retirees blend the two - a guaranteed floor for essentials, drawdown for the rest.

Annuity calculator: what guaranteed income could your pot buy?

Indicative market-average rates by age, with the real trade-offs priced in: spouse provision, guarantee periods, inflation-linking and enhanced health rates. The same annuity model the full Hundred Summers plan uses. Your figures never leave your browser.

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Worked example

Computed when this page was built by the same engine that runs the calculator above, so the figures below and the live tool can never disagree. Change any input above to see your own.

Inputs
Pension pot	£200,000
Age at purchase	66
Spouse provision	None
Guarantee period	None
Inflation-linked	No
Enhanced (health) rates	No

Results
Indicative annuity rate	7.32%
Guaranteed income a year	£14,640
A month	£1,220
Years until the pot is paid back	13.7

The next question

How long would drawdown last instead? →Pension drawdown calculator

Or answer it with everything else: the full Hundred Summers plan connects your pay, pensions, savings, property, tax and spending year by year, and stress-tests them across 500 simulated market histories.

Read the guides

UFPLS, drawdown or annuity: the three ways to take pension income →
How the 25% tax-free entitlement works differently under UFPLS and flexi-access drawdown, what crystallisation means, the £268,275 lump sum allowance, and where annuities fit: the mechanics behind the choice.
Sequence-of-returns risk, shown with real market history →
Two retirees earn the same average return and one runs out of money: why the order of returns dominates retirement outcomes, which historical cohorts it broke, and how to test a plan against it honestly.
What a defined benefit pension is actually worth →
NHS, teachers, civil service, old company schemes: why £10,000/yr of DB pension is worth more than most people's entire DC pot, how to compare added-pension offers, and why transferring out is almost always wrong.
What happens to your pension when you die →
Nominations and scheme discretion, the age-75 line that decides whether your beneficiaries pay income tax, beneficiary drawdown, what defined benefit schemes pay, and how the April 2027 inheritance tax change rewrites the answer.

How annuities are priced

An annuity is insurance in reverse: you hand an insurer a pension pot and they pay a guaranteed income until you die, however long that is. The rate depends mostly on your age (older buyers get more per pound, because the insurer expects to pay for fewer years), and on gilt yields (what the insurer can safely earn on your money). Every option you add (income continuing to a spouse, a guarantee period, inflation-linking) is paid for out of the starting rate, which is why an index-linked joint-life annuity starts at barely half the level single-life income.

Enhanced annuities pay more if your life expectancy is reduced: smoking, diabetes, heart conditions and many common medications all qualify. Around half of applicants qualify for some enhancement, and it is one of the few times poor health improves a financial quote, so always disclose honestly when getting real quotes.

The certainty trade-off

Once bought, an annuity usually cannot be changed or cashed in, and beyond any guarantee period or spouse provision, nothing passes to your estate. Against that: no investment risk, no running-out risk, and no decisions to make at 90. The full Hundred Summers plan models an annuity, flexible drawdown, or a blend of the two inside your whole lifetime picture, including the tax on the income and what each route leaves behind.

Education, not advice. Figures are indicative market averages, not quotes, and the right shape of retirement income depends on circumstances this page cannot capture. For a personal recommendation speak to an FCA-regulated financial adviser; free impartial guidance is available from MoneyHelper, and Pension Wise offers free guidance appointments for over-50s.