Annuity income by pot size — UK examples.
How much annuity income different pension pots could buy, using published best-buy rate data. These are worked examples, not personal quotes.
- ▸Using Hargreaves Lansdown's 30 April 2026 best-buy table, a £100,000 pot at age 65 would imply about £7,892/year before tax from a single-life, level annuity with no guarantee.
- ▸On the same assumptions, £300,000 implies about £23,676/year, £500,000 about £39,460/year, and £1 million about £78,920/year.
- ▸These figures are scaled from published £100,000 quote data, not personalised quotes. Actual income depends on age, health, postcode, spouse details, guarantees, inflation-linking and provider pricing.
- ▸Annuity income is taxable pension income, and buying a lifetime annuity is usually difficult or impossible to reverse after any cooling-off period.
Direct answer
A £100,000 pension pot could indicate about £7,892 a year before tax from a single-life, level annuity at age 65, based on Hargreaves Lansdown's 30 April 2026 best-buy table. On the same assumptions, a £300,000 pot would indicate about £23,676 a year, a £500,000 pot about £39,460 a year, and a £1 million pot about £78,920 a year.
Those are not guaranteed quotes. They are scaled examples using published £100,000 annuity-rate data. The income actually offered can change with age, health, postcode, smoker status, partner details, guarantee period, inflation protection, provider pricing and market rates.
Information, not advice: this guide explains how annuity income can vary by pension pot size. It does not recommend buying an annuity, choosing drawdown, transferring a pension, or selecting any provider. Annuities can be difficult or impossible to change once bought, so consider free Pension Wise guidance or regulated financial advice before making a decision.
Assumptions behind the examples
The tables below use the single-life, level, no-guarantee annuity figure from Hargreaves Lansdown's 30 April 2026 table: £7,892 a year for each £100,000 pension pot at age 65.
That means the examples assume:
- the whole pension pot shown is used to buy an annuity;
- income is shown before Income Tax;
- the annuity is single-life, so it stops when the annuitant dies;
- the annuity is level, so the payment does not rise with inflation;
- there is no guarantee period;
- the buyer is age 65;
- the examples are scaled from a £100,000 published rate, rather than being personalised quotes.
This is useful for a quick sense check, but a real quote can be materially different.
Annuity income by pension pot size at age 65
Published examples, not quotes:
| Pension pot used for annuity | Approx annual income | Approx monthly income |
|---|---|---|
| £50,000 | £3,946 | £329 |
| £100,000 | £7,892 | £658 |
| £150,000 | £11,838 | £987 |
| £200,000 | £15,784 | £1,315 |
| £250,000 | £19,730 | £1,644 |
| £300,000 | £23,676 | £1,973 |
| £400,000 | £31,568 | £2,631 |
| £500,000 | £39,460 | £3,288 |
| £750,000 | £59,190 | £4,933 |
| £1,000,000 | £78,920 | £6,577 |
These figures are before tax and before considering State Pension, other pensions, savings income, employment income or partner income.
Our annuity calculator can model scenarios, and the annuity rates UK guide tracks the current published rate snapshot. Provider or broker quotes are needed for actual pricing.
If 25% tax-free cash is taken first
Many people do not use their whole pension pot to buy an annuity. They may take up to 25% as tax-free cash first, subject to the lump sum allowance and scheme rules, then use the remaining 75% to buy an annuity.
If only 75% of the pot is used for an annuity, the income estimate falls accordingly.
| Total pension pot | Pot left for annuity after 25% tax-free cash | Approx annual annuity income | Approx monthly income |
|---|---|---|---|
| £50,000 | £37,500 | £2,960 | £247 |
| £100,000 | £75,000 | £5,919 | £493 |
| £150,000 | £112,500 | £8,879 | £740 |
| £200,000 | £150,000 | £11,838 | £987 |
| £250,000 | £187,500 | £14,798 | £1,233 |
| £300,000 | £225,000 | £17,757 | £1,480 |
| £400,000 | £300,000 | £23,676 | £1,973 |
| £500,000 | £375,000 | £29,595 | £2,466 |
| £750,000 | £562,500 | £44,393 | £3,699 |
| £1,000,000 | £750,000 | £59,190 | £4,933 |
MoneyHelper explains that defined contribution pension holders can usually take up to 25% of their pension tax-free from age 55, rising to 57 from April 2028, but the amount can be limited by lump sum allowance rules and scheme-specific protections.
How age changes the income
Older buyers usually receive higher annuity income for the same pot because the provider expects to pay the income for fewer years. That does not automatically make delaying an annuity better: while waiting, market rates can move and the pension pot might rise or fall if it remains invested.
Published examples, not quotes:
| Age | £100k pot | £300k pot | £500k pot | £1m pot |
|---|---|---|---|---|
| 55 | £6,663 | £19,989 | £33,315 | £66,630 |
| 60 | £7,037 | £21,111 | £35,185 | £70,370 |
| 65 | £7,892 | £23,676 | £39,460 | £78,920 |
| 70 | £8,618 | £25,854 | £43,090 | £86,180 |
| 75 | £9,826 | £29,478 | £49,130 | £98,260 |
These examples use the single-life, level, no-guarantee figures in the Hargreaves Lansdown 30 April 2026 table and scale them by pot size.
£300k and £500k under different annuity options
A higher starting income is not the only thing to compare. Adding a guarantee period, inflation link, fixed annual increase, or spouse's pension can reduce starting income but may change the balance between initial income, survivor protection and inflation protection.
Published examples, not quotes:
| Annuity option at age 65 | £300k pot: annual income | £300k pot: monthly income | £500k pot: annual income | £500k pot: monthly income |
|---|---|---|---|---|
| Single life, level, no guarantee | £23,676 | £1,973 | £39,460 | £3,288 |
| Single life, level, 5-year guarantee | £23,496 | £1,958 | £39,160 | £3,263 |
| Single life, RPI-linked, 5-year guarantee | £16,314 | £1,360 | £27,190 | £2,266 |
| Single life, 3% escalation, 5-year guarantee | £17,835 | £1,486 | £29,725 | £2,477 |
| Joint life 50%, level, no guarantee | £21,966 | £1,830 | £36,610 | £3,051 |
| Joint life 50%, 3% escalation, no guarantee | £15,999 | £1,333 | £26,665 | £2,222 |
The RPI-linked and 3% escalation examples start lower because the income is designed to increase over time. A joint-life annuity starts lower because some income may continue to a spouse or partner after the first person dies.
How annuity income compares with retirement spending standards
The Retirement Living Standards put one-person annual retirement spending at £13,400 for a minimum lifestyle, £31,700 for a moderate lifestyle and £43,900 for a comfortable lifestyle. These are spending benchmarks, not personalised targets and not the same as gross taxable income.
Using the age-65 level annuity examples above:
- a £100,000 pot could indicate around £7,892 a year before tax;
- a £300,000 pot could indicate around £23,676 a year before tax;
- a £500,000 pot could indicate around £39,460 a year before tax;
- a £1 million pot could indicate around £78,920 a year before tax.
Those figures become more meaningful when combined with State Pension entitlement, defined benefit pensions, savings, housing costs and tax. For example, a person with a full new State Pension and a private annuity will usually need to think about the combined taxable income, not the annuity in isolation.
Why two people with the same pot can get different annuity income
Two people with the same £300,000 pot can receive different annuity quotes. Common reasons include:
Age. Older applicants usually receive higher starting income than younger applicants, all else equal.
Health and lifestyle. Some people qualify for an enhanced annuity because of health conditions, smoking history, weight, medication, alcohol use or other lifestyle details. MoneyHelper and annuity providers encourage people to give accurate health and lifestyle information when requesting quotes.
Single-life or joint-life. A single-life annuity normally pays more at the start because it only covers one person. A joint-life annuity can continue some income to a spouse or partner, so the starting income is usually lower.
Level or increasing income. A level annuity pays the same amount each year. An escalating or inflation-linked annuity starts lower but may rise over time. This can matter because a fixed £20,000 income may buy less in 10 or 20 years if prices rise.
Guarantee period. A guarantee period can mean payments continue for a set period even if the annuitant dies soon after buying the annuity. The longer or more protective the guarantee, the more likely it is to reduce the starting income.
Market rates. Annuity providers typically price annuities with reference to long-term interest rates, gilt yields, life expectancy assumptions and their own pricing models. Published examples can move quickly.
Annuity or drawdown?
An annuity and pension drawdown solve different problems.
| Option | Main strength | Main risk or trade-off |
|---|---|---|
| Annuity | Guaranteed income, often for life | Less flexibility; usually cannot be changed once bought |
| Drawdown | Flexible withdrawals and continued investment control | Investments can fall; income can run out if withdrawals are too high |
| Mix of both | Some secure income plus some flexibility | More moving parts; may need more planning |
The FCA's 2024/25 retirement income market data shows drawdown sales rose to 349,992 and annuity sales rose to 88,430. That does not mean one route is better. It shows both are actively used, and the appropriate structure depends on the person's circumstances, risk tolerance, guarantees, household income and need for flexibility.
Related guides:
Quick answers by pot size
What annuity income could £100k buy? Using the 30 April 2026 age-65 example, a £100,000 pot could indicate around £7,892 a year, or about £658 a month, before tax for a single-life, level, no-guarantee annuity.
What annuity income could £300k buy? Using the same assumptions, a £300,000 pot could indicate around £23,676 a year, or about £1,973 a month, before tax. If 25% tax-free cash were taken first and only £225,000 were used for the annuity, the indicative income would fall to about £17,757 a year. See also: what annuity will £300k buy?
What annuity income could £500k buy? Using the same assumptions, a £500,000 pot could indicate around £39,460 a year, or about £3,288 a month, before tax. If 25% tax-free cash were taken first and only £375,000 were used for the annuity, the indicative income would be about £29,595 a year.
What annuity income could £1m buy? Using the same assumptions, a £1 million pot could indicate around £78,920 a year, or about £6,577 a month, before tax. Larger pots can raise extra tax, estate and product-choice questions, especially where the income interacts with State Pension, other pensions, savings or employment income.
Can an annuity run out? A lifetime annuity is designed to pay an income for life, but some annuities are fixed-term products instead. The exact terms matter. A lifetime annuity with no spouse's pension or guarantee can stop when the annuitant dies, even if the buyer dies shortly after purchase.
Is a level annuity better than an inflation-linked annuity? Neither is automatically better. A level annuity usually starts higher, while an inflation-linked or escalating annuity usually starts lower but can rise over time. The trade-off is between starting income and protection against future price rises.
Do smokers or people with health conditions get more? They may. Enhanced annuities can pay more where health or lifestyle factors reduce life expectancy. The only reliable way to know is to give accurate information and compare personalised quotes.
Common checks before comparing annuity quotes
Common issues to understand before comparing annuity quotes include:
- whether the pension has guaranteed annuity rates or safeguarded benefits;
- whether there are exit charges or market value adjustments;
- whether taking tax-free cash first changes the amount available for income;
- whether the income needs to continue for a spouse or partner;
- whether level income is enough if inflation rises;
- how annuity income interacts with State Pension and tax;
- whether combining annuity and drawdown changes the balance between secure income and flexibility.
MoneyHelper offers free, impartial Pension Wise guidance for people aged 50 or over with defined contribution pensions. Regulated financial advice may be useful where the decision is large, irreversible, or involves safeguarded benefits.
- •Annuity rates change frequently and quotes are normally guaranteed only for a limited time.
- •The figures above are illustrations scaled from published £100,000 best-buy data, not personal quotes.
- •Annuity income is taxable as pension income.
- •The Retirement Living Standards are expenditure benchmarks, not gross income targets.
- •Annuity purchase is usually irreversible after any cooling-off period, so the quote terms and options matter.
- ▸Hargreaves Lansdown's 30 April 2026 best-buy table showed £7,892/year from a £100,000 pension for a 65-year-old buying a single-life, level annuity with no guarantee. [Hargreaves Lansdown]
- ▸FCA retirement income market data shows annuity sales rose from 82,061 in 2023/24 to 88,430 in 2024/25, while drawdown sales rose to 349,992. [FCA]
- ▸The Retirement Living Standards show one-person household annual expenditure of £13,400 minimum, £31,700 moderate and £43,900 comfortable. [Retirement Living Standards]
This is factual information, not financial advice. If you're unsure what's right for your situation, speak to an FCA-regulated financial adviser.