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    Home » Annuity Sales Rise in 2025/26 as Enhanced Products Take the Lead
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    Annuity Sales Rise in 2025/26 as Enhanced Products Take the Lead

    Aisha MahmoodBy Aisha Mahmood28th September 2026No Comments4 Mins Read
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    Annuity sales rose in 2025/26 across every major product category, with Pensions Age Magazine reporting that total annuity purchases increased by 13.2% to 100,144 over the year. For retirees building a reliable income strategy, the breadth of that growth matters as much as the headline number.

    Enhanced Annuities Cross a Meaningful Threshold

    Canada Life’s analysis of the latest Financial Conduct Authority retirement income market data shows that enhanced annuity sales increased 25% to 52,764, up from 42,339. Enhanced annuities now account for more than half of all annuity sales for the first time. These products offer higher income rates to retirees with health conditions or lifestyle factors that may affect life expectancy, so the category’s dominance suggests that more buyers are understanding the value of disclosing medical information at the point of purchase.

    Escalating annuity sales rose 27% to 22,099 from 17,427. These products provide an income that increases over time, either in line with inflation or by a fixed percentage, making them a natural consideration for anyone concerned about the eroding effect of inflation on a fixed income over a retirement that could last two decades or more.

    Value protected annuity sales grew most rapidly in percentage terms, up 38% to 8,737 from 6,346. They now account for 9% of total annuity sales, up from 4% in 2021/22, though they remain the smallest category by volume. Value protection is designed to provide reassurance to retirees worried about dying shortly after purchasing an annuity, since it can return a lump sum to their estate. However, Kris Black, head of annuities at Canada Life, flagged one consideration that should not be overlooked: value protection lump sums are due to be included in inheritance tax calculations from April 2027. Anyone purchasing a value protected annuity today should factor that change into their estate planning.

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    Open-Market Activity and the Case for Shopping Around

    Open-market annuity sales rose 19% to 64,891, up from 54,606. Black said the rise showed more customers were shopping around for products suited to their needs. ‘It is particularly encouraging to see the rise in open-market annuities, indicating that more customers are shopping around,’ he said. ‘This helps secure not only a competitive rate, but also an annuity product that is structured around someone’s specific needs.’

    For those managing a self-invested personal pension, the open-market option is worth understanding carefully. Accepting the first annuity quote from a pension provider (without comparing rates) remains one of the most avoidable ways to leave retirement income on the table. Canada Life notes that annuity rates have reached decade highs, which reinforces the case for locking in a guaranteed income stream for those with little appetite for ongoing investment risk.

    Annuity Sales Rise in 2025/26, but Drawdown Also Grows

    The broader FCA data shows that annuities are not displacing drawdown; both routes are growing simultaneously. Plans entering drawdown increased by 10.5% to 401,137 in the year ending 31 March 2026, compared with 362,946 in the previous year, according to the FCA retirement income market data. That parallel growth matters for portfolio construction. A blended retirement income strategy, part secured annuity income covering essential expenditure and part invested drawdown providing flexibility, is precisely the kind of approach that addresses sequence-of-returns risk without surrendering all upside.

    ‘Growing take-up across a wider range of annuity options shows that awareness is growing about how annuity options can be tailored to suit individual circumstances in retirement,’ Black said.

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    For a retiree weighing this decision today, the question is not whether annuities or drawdown is superior in the abstract. It is which combination of guaranteed income and invested assets best matches their spending needs, health profile and risk tolerance over a 20-to-30-year horizon. The FCA’s full 2025/26 retirement income market data is publicly available for those who want to study the figures in greater depth before any decision is made.

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    Aisha Mahmood

    Aisha Mahmood trained in economics and spent ten years in financial planning before moving to journalism. She worked at a fee-based advisory firm, specialising in retirement income and intergenerational wealth planning, and spent two years at a robo-advisor building the content that was supposed to make people trust algorithms with their pensions. She writes about savings, pensions, tax-efficient investing, and the personal finance decisions that keep people awake at three in the morning. She explains jargon only when she has to and cuts it when she can. Aisha lives in Birmingham. She thinks financial literacy should be on the national curriculum and that most savings ads are aspirational fiction.

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    intelliflo Mabel Insights acquisition signals deeper advice platform push

    By Aisha Mahmood12th October 2026

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