More people are exploring fixed-term annuities, according to new data from Standard Life, a retirement specialist focused entirely on retirement savings and income. Quote volumes rose 15% in the first half of 2026 compared with the second half of 2025*, suggesting growing interest in retirement income solutions that can provide certainty today while preserving flexibility for the future.
How much income can a fixed-term annuity provide?
A 65-year-old with a £100,000 pension pot could currently secure a guaranteed income of around £13,800 a year for five years while retaining a £50,000 maturity value at the end of the term. That income is higher than the current full State Pension of £12,548 a year, highlighting how fixed-term annuities can provide meaningful levels of guaranteed income while preserving flexibility for future retirement decisions.
| Term | Annual income with a £100,000 pension pot | Maturity value at end of term |
| 5 years | £13,800 | £50,000 |
| 10 years | £9,100 | £50,000 |
Standard Life’s latest Retirement Voice research** found that people would ideally like to retire at age 62.3 but do not expect to stop working until age 67.6, creating a retirement expectation gap of 5.3 years. For some retirees, fixed-term annuities may provide a way to secure guaranteed income for a defined period while retaining the flexibility to review their options later.
Unlike a lifetime annuity, a fixed-term annuity provides a guaranteed income for an agreed period before returning a maturity value at the end of the term. The client can then decide how to use that maturity value based on their circumstances at the time. The flexibility built into the product means clients can choose different combinations of income and maturity value depending on their priorities. Some may opt for a higher level of guaranteed income during the term, while others may preserve more of their pension savings for future decisions.
“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. Current rates mean some retirees can secure an income that’s higher than the full new State Pension for a set period, while retaining a maturity value for future use. For people who want guaranteed income without giving up future flexibility, that can be an attractive combination.
“At the same time, our latest Retirement Voice research shows many people would like to retire more than five years earlier than they currently expect to. While there is no single solution to that challenge, people are increasingly looking for ways to balance income certainty today with flexibility for the future.”
Pete Cowell, Head of Annuities at Standard Life said:
What are fixed-term annuities?
A fixed-term annuity provides a guaranteed income for an agreed period rather than for the rest of your life. At the end of the term, you receive a maturity value to use as part of your future retirement plans.
It could be used to:
- help fund the period between stopping work and receiving the State Pension;
- provide income certainty during the early years of retirement; or
- sit alongside other sources of income, such as drawdown and savings.
Pete 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.”
*Internal Standard Life data
