Standard Life has reported growing interest in fixed-term annuities, with retirees exploring ways to secure guaranteed income while retaining flexibility over future pension decisions.
More people are interested in fixed-term annuities, with a 15% increase in quotes in the first half of 2026 compared with the previous six months, according to new data from Standard Life.
The provider said current rates mean a 65-year-old with a £100,000 pension pot could secure a guaranteed annual income of around £13,800 for five years, while retaining a £50,000 maturity value at the end of the term.
This would provide an annual income above the full new State Pension of £12,548, although payments would stop after five years
Alternatively, the same pension pot could provide £9,100 a year over 10 years, with a £50,000 maturity value.
Unlike lifetime annuities, fixed-term products provide a guaranteed income for an agreed period, after which retirees can decide how to use the maturity value.
Pete Cowell, head of annuities at Standard Life, said: “Retirement increasingly looks less like a single event and more like a series of financial decisions made over many years. People’s circumstances, spending needs and priorities can change over time, which means flexibility can be just as important as certainty
“The increase in quote volumes suggests fixed-term annuities are becoming part of that conversation.”
Bridging the retirement gap
Standard Life’s latest Retirement Voice research found that people would ideally like to retire at an average age of 62.3 but do not expect to stop working until 67.6, a gap of 5.3 years, as Pensions Expert previously reported.
The provider suggested fixed-term annuities could help some savers bridge the period between leaving work and receiving their State Pension, or provide income certainty during the early years of retirement alongside other savings and drawdown arrangements.
Cowell said: “Before buying a fixed-term annuity, retirees should consider how long they need the income for and what role the maturity value could play in future plans.
“Retirement income doesn’t have to come from a single source. A fixed-term annuity can sit alongside drawdown, savings and the State Pension, helping people combine the reassurance of guaranteed income with the opportunity to review their plans later.”
