What rising annuity rates and the pensions dashboard mean for your future income

Planning for retirement income has become more interesting for UK savers over the past year. On one side, annuity rates have improved, which means the amount of guaranteed income available from a pension pot is higher than many people have seen for years. On the other, the pensions dashboard is moving closer to reality, promising a simpler way to find pension pots before making big retirement decisions.

These two developments matter because retirement choices are often hard to reverse. If you are weighing up drawdown, cash withdrawals, or buying an annuity, having a clearer view of your pension savings could help you make a more informed choice. For many households, the key question is not just how much they have saved, but how that money can be turned into reliable future income.

Why rising annuity rates are getting attention again

Annuities have moved back into the spotlight because rates remain much more attractive than they were for many years. Standard Life said a 65-year-old with a £100,000 pension pot could expect around £7,720 a year from an annuity at a 7.72% rate, describing this as the highest point of the decade. Hargreaves Lansdown also noted in February 2026 that high interest rates have had a positive effect on pension annuities and the secure income they can provide.

The regulator’s data suggests more people are responding to that change. According to the FCA, annuity sales rose 7.8%, from 82,061 in 2023/24 to 88,430 in 2024/25. That is a notable increase, especially after a long period when annuities were often seen as less competitive than flexible alternatives.

There is also evidence that larger pension pots are now being converted into guaranteed income. The ABI said in February 2026 that bigger pension pots helped drive a record-breaking year for individual annuity premiums. In practical terms, that tells us some retirees are not only reconsidering annuities, but doing so at a meaningful scale.

What better annuity rates could mean for your future income

For many people, the main attraction of an annuity is certainty. You exchange some or all of a pension pot for an income that is designed to be paid for life, which can make budgeting much easier in retirement. When rates rise, that certainty becomes more affordable because every £1 of pension savings can buy more annual income than before.

Recent pounds-and-pence examples show why this matters. MoneyWeek reported that as of 3 March 2026, average annuity income for a 65-year-old buying a single-life level annuity with a £50,000 purchase price was £3,558, up from £3,498 in March 2025. The increase is not enormous on its own, but over a long retirement even moderate improvements can make a real difference to household cash flow.

Still, higher rates do not automatically mean an annuity is right for everyone. A level annuity can offer a stronger starting income, but that income does not rise with inflation. So while rising annuity rates improve short-term certainty, they do not remove the risk that your spending power may fall over time.

Why drawdown is still growing faster than annuities

Although annuities are recovering, drawdown remains a major part of the retirement market. The FCA reported that the total number of pension plans accessed for the first time rose 8.6% to 961,575 in 2024/25, while drawdown sales jumped 25.5% to 349,992. That shows many retirees still value flexibility, access to capital, and the ability to adjust withdrawals over time.

Drawdown can be useful because retirement rarely unfolds in a straight line. Some people spend more in the early years on travel, home improvements, or family support, and then want more certainty later on. This is one reason why the ABI’s Rob Yuille highlighted the idea of “flex then fix”, using savings flexibly in early retirement and locking in a guaranteed income later, when rates or personal circumstances are more favourable.

That strategy may suit some savers, but it depends on good planning. Drawdown involves investment risk, withdrawal risk, and the possibility of taking too much too soon. In other words, flexibility can be valuable, but it works best when it is matched with a clear view of all your pensions and a realistic idea of how much income you will need.

How bond markets have helped lift annuity income

One reason annuity rates have improved is that long-term interest rates have been higher. The Bank of England said the 10-year gilt yield reached about 4.8% and the 30-year gilt yield about 5.7% at their 2025 peaks before easing later in the year. Because annuity pricing is closely linked to long-dated gilt yields, higher yields have generally supported better annuity quotes.

This matters because it shows annuity rates are not fixed forever. They move with market conditions, particularly bond markets. If yields rise, annuity income may improve; if they fall, quotes can become less generous. So anyone considering an annuity should be careful about assuming today’s rates will still be available months later.

At the same time, market-linked pricing helps explain why some people are revisiting the timing of their retirement-income decisions. Delaying a purchase for a better age or stronger rates can sometimes improve the income available, but only if that delay fits your wider financial plan. Waiting without a plan can be just as risky as acting too quickly.

What the pensions dashboard is designed to do

The pensions dashboard is mainly about visibility. The FCA says dashboards will let consumers securely access online information about their pensions that are not yet paying benefits. In simple terms, it should become easier to see old and current pension pots in one place before deciding what to do with them.

That could be especially useful for people who have changed jobs several times and may have accumulated multiple workplace pensions. Missing even one old pot can distort retirement planning. If you think you have £150,000 across your pensions but the real figure is £190,000 once all pots are found, that could affect whether you choose drawdown, an annuity, cash withdrawals, or a combination.

It is important to understand what dashboards are not for, at least initially. FCA guidance says they focus on pensions not yet in payment, so they are mainly a planning tool rather than a live income-management tool. Their greatest value is likely to come before retirement decisions are made, not after income has already been set up.

Where the dashboard rollout stands now

The dashboard project is no longer just a policy idea. The FCA says pension providers must connect to the dashboards ecosystem a of the 31 October 2026 deadline, with firms needing to register with MaPS, connect technically, and comply with dashboard rules. This means the work is increasingly about delivery and execution rather than broad principle.

Connection has already been staged. FCA guidance said relevant connect-by dates were 30 April 2025 for firms with 5,000 or more relevant members and 31 January 2026 for firms with fewer than 5,000. The DWP has also said the staged timetable is not mandatory, but following it helps schemes and providers connect a of the end-October 2026 target.

Progress has been significant. By December 2025, around 60 million, or three-quarters, of workplace and personal pension records in scope had connected to the dashboards ecosystem, according to the Money and Pensions Service. MaPS also said connection activity was moving forward at a steady pace and remained on course, although the public launch still depends on the next stages of rollout. The government will give at least six months’ notice before the MoneyHelper Pensions Dashboard becomes publicly available.

Why the pensions dashboard could change annuity and drawdown decisions

The biggest practical benefit of the pensions dashboard may be that it helps people make retirement-income decisions from a more complete picture. If all or most pension entitlements can be seen together before benefits are taken, savers may be less likely to make irreversible choices based on incomplete information. That matters whether the decision is to buy an annuity, start drawdown, or take tax-free cash.

Better visibility may be particularly helpful for people considering annuitising later. The “flex then fix” approach depends on knowing what resources are available across all pension pots, not just the most recent one. If dashboards reduce the risk of lost or forgotten pensions, they could improve the quality of those decisions and help some people lock in income from a larger overall base.

The FCA’s market data reinforces why this matters. With 961,575 pension plans accessed for the first time in 2024/25, and both drawdown and annuity activity rising, more people are reaching decision points where clear information is valuable. As retirement choices become more active, a reliable pre-decision information layer becomes more important too.

The limits of better visibility: inflation and adequacy still matter

Even with stronger annuity rates and better pension visibility, there are still two major challenges: inflation and adequacy. Inflation matters because a higher starting annuity income is not the same as a rising income. In 2024/25, purchases of inflation-protected or escalating annuities accounted for about one-fifth of all sales and were up 17% year on year, showing that many retirees are thinking carefully about the trade-off between income now and protection later.

Adequacy is a separate issue. The 2025 Retirement Living Standards update says a two-person household receiving the full new State Pension in 2025/26 gets £23,946 combined, enough to meet the Minimum standard cost of £21,600 a year. But many households want or need more than a minimum lifestyle, and the Moderate and Comfortable standards sit higher.

There is also a clear warning in official projections. DWP’s Analysis of Future Pension Incomes 2025 says 13% of the working-age population, or 4.6 million people, are projected to have pension income below the PLSA minimum Retirement Living Standard. So while the pensions dashboard may help people find what they have, it does not solve the problem of not having enough. Finding lost pots is useful, but it is not the same as closing an income gap.

How to think about your own next steps

If you are approaching retirement, this is a good time to review how your future income might be built. Start with the basics: what State Pension you expect, what workplace and personal pensions you hold, whether any old schemes may have been forgotten, and how much income you are likely to need. Once those foundations are clearer, annuity and drawdown choices become easier to compare on a like-for-like basis.

It may also help to think in layers. For example, some people want a secure base of guaranteed income to cover essential bills, with flexible access to other pension savings for discretionary spending. Others may prefer more flexibility first and greater certainty later. Neither route is automatically better; the right shape depends on your health, household spending, attitude to risk, family priorities, and tax position.

Estate planning is also becoming more relevant. The ABI has said that with pensions coming into scope of inheritance tax from April 2027, annuities may appeal not just for spending security but also because they can include options to provide for loved ones. That does not make annuities the default choice, but it does mean retirement-income planning is increasingly connected to wider family financial planning.

The key message is that your future income is being shaped by two useful trends at once: stronger annuity rates and improving pension visibility. Better rates can make guaranteed income more competitive, while the pensions dashboard should make it easier to see what resources you have before making important decisions. Together, they create a better foundation for retirement planning than many savers have had in recent years.

Even so, a clearer picture is not the same as a complete answer. Inflation, sustainability, tax, and simple affordability still matter, and millions are still projected to fall short of minimum retirement income standards. A sensible next step is to use these changes as a reason to review your pensions early, understand your options carefully, and make decisions from a position of clarity rather than urgency.