Annuities have evolved in recent years, offering retirees more options than ever before. 

Even so, with research suggesting that 48% of over-50s aren’t familiar with annuities or how they work, you may not fully understand how they could support you in retirement. [1]
 
An annuity could provide you with a regular, guaranteed income in retirement

Typically, you can buy an annuity with some or all of your pension pot. It will then pay you an income every year for life, or for an agreed number of years. 

There’s a variety of annuities available, ranging from fixed-term and lifetime to investment-linked and purchased life annuities. Finding the most suitable one for your needs is important, and we’re here to help you make the right decision.

5 common annuity myths, debunked

1. "Annuities offer poor value”

If you believe annuities provide low returns, as many do, it’s time for a rethink.

As of May 2025, average annuity rates for a healthy 65-year-old reached 7.72% – a 10% increase from the previous year. For a £100,000 pension pot, this translates to an annual income of approximately £7,720 [2].
 
Additionally, 70-year-olds can now attain rates up to 8.54%. For a 70-year-old man, this would mean a total lifetime income of around £136,680, while a woman could expect approximately £153,770 [3].
 
2. “Annuities are inflexible”

While traditional annuities were often rigid, modern options offer far more flexibility.
 
You can choose joint-life, guaranteed, and index-linked annuities – one or multiple annuities could help you tailor your income to your specific needs.
 
A flexible annuity gives you even more control. You can decide how much of your income to use to open the annuity and adjust the level of income, allowing you to “flex” it as your needs change during retirement.
 
3. “I must buy an annuity from my pension provider”

One of the most common myths surrounding annuities is that you must buy an annuity from your pension provider. In fact, shopping around can lead to better deals – and you have all the freedom to do so.

In 2024/25, 62% of annuities were purchased after customers had compared rates from different providers. [4]
 
If you fail to compare different annuity options, you could miss out.
 
Analysis from the Financial Conduct Authority’s (FCA) Retirement Income Market Data suggests that not shopping around could lead a healthy 75-year-old with a £50,000 pension to miss out on up to £650 every year. [5]
 
Because the gap between the best and worst available annuities widens with age, it’s important to shop around before simply accepting the first offer.
 
If in doubt, get in touch. We can help you understand which annuity might be most appropriate for you.

4. “Annuities can't keep pace with inflation”

Inflation-protected annuities increase your income annually in line with inflation, helping to maintain your purchasing power throughout retirement.
 
While an inflation-protected annuity may cost more than a level annuity, the long-term benefits could more than make up for this.
We’re here to help you understand all your options and identify what might be most appropriate for you.

5. “Annuities are only for the wealthy”

Annuities are incredibly versatile. Designed to provide a steady income stream, an annuity may be among the most sensible options if you want to secure your financial future – whatever your level of wealth.
 
With annuity rates rising, even modest pension pots could provide a substantial guaranteed income.

Get in touch

If you’re approaching or already enjoying retirement and would like to explore your income options, we’re here to help.
Email info.wp@titanwh.com or call us on 0800 048 0150.

Please note
The information contained in this article is based on the opinion of Titan Wealth Planning and does not constitute financial advice or a recommendation for any investment or retirement strategy.
All information is correct at the time of writing and is subject to change in the future.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
 
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

TWP538