The number of over-eighties buying annuities hit a decade-long high in the first half of 2026, as higher rates and incoming inheritance tax rule changes reshape retirement income strategies. New annuitants aged 80 and over rose 41 per cent compared with the first half of last year, according to the Association of British Insurers.

Rising gilt yields — which hit their highest level since 2007 — continue boosting rates. Annuity sales over £100,000 rose 22 per cent. "A healthy 65-year-old now can get a rate very close to 8 per cent," said Pete Cowell, head of annuities at Standard Life. Average rates for this bracket dropped below 5 per cent in 2019.

Some 68 per cent of new annuitants shopped around rather than buying from their current provider. Joint-life annuities rose 8 per cent, attracting unmarried couples seeking guaranteed income not subject to inheritance tax, said Clare Moffat of Royal London. Others buy annuities to fund whole-of-life policies covering inheritance tax bills.

"Higher gilt yields have strengthened the case for annuities, but the right solution will always depend on an individual's wider financial circumstances," said Ian Cook of Quilter Cheviot.