The Annuity Blind Spot: Findings from National Annuity Day

21 Oct 2025

We know that Annuities are often misunderstood, that’s why we've partnered with Pension Potential, Legal & General and Standard Life for the first National Annuity Day on 21st October 2025. 

YouGov research for the UK’s first-ever National Annuity Day, commissioned by Pension Potential, reveals a major gap between what people want in retirement—stability, comfort, and predictability—and their understanding of how annuities can provide it. The survey warns that this lack of knowledge could leave millions financially vulnerable, particularly women.

Although annuity sales rose 34% to £7bn in 20241,driven by high rates and interest in guaranteed income, most over-50s do not know how annuities work or how they could benefit.

National Annuity Day aims to close this knowledge gap by educating people and supporting advisers and providers in reaching those who could benefit most.

Key Findings

The You Gov survey of 2,058 over 50s revealed a major gap between what people want in retirement and what they know about products that can deliver it.

  • The Annuity Blind Spot: 35% of over-50s want a “steady and stable” income but do not recognise annuities as the way to achieve it.
  • The Emotional Disconnect: 52% of women (vs. 46% of men) prioritise “comfort and freedom,” yet few realise annuities can offer this security.
  • The Inflation Gap: Only 13% of women (compared to 26% of men) understand annuities can include inflation protection, highlighting a need for targeted advice to address the persistent gender pension gap and lower financial engagement.
  • Regional Disparity: Only 47% of Londoners prioritise joint-life cover for a surviving spouse, compared to 62% in the West Midlands.
  • Reliance on the State: 15% of women will rely solely on the state pension as they have no private savings, compared to 9% of men

Why Annuities Matter Most for Women

Annuities are particularly suited to those seeking stability and lifelong financial security:

  • Guaranteed Freedom: Provides predictable income for everyday comfort and unexpected costs.
  • Longevity Protection: Women typically live longer, so annuities protect against outliving savings.
  • Low-Risk Stability: Offers peace of mind for those less comfortable with market volatility.
  • Inheritance Advantage: New inheritance tax rules from 2027 will make most defined contribution pensions taxable, but annuities can, in certain circumstances, remain exempt. Many over-50s, particularly women, are unaware of this advantage, missing an opportunity to protect family wealth.

Industry Implications and Recommendations

The research highlights opportunities for the pensions industry to close knowledge gaps, reduce the gender pension gap, and help more people achieve financial security:

  1. Promote a blended approach to pension savings:
    Encourage consideration of the different ways products such as annuities can help support people’s approach to income in retirement, by providing a guaranteed income that can work alongside other income sources, such as state pension and a private or workplace pension.
  2. Publish gender-based data on annuity participation and payments:
    Publishing data on annuity ownership and payment levels by gender could better inform product design and engagement strategies.
  3. Highlight longevity benefits for women:
    Women typically live longer, making annuities particularly valuable for providing a guaranteed income for life.
  4. Position annuities as a good fit for lower-risk investors:
    Annuities offer guaranteed income with no market exposure, an ideal solution for those less comfortable with investment risk. Emphasise FSCS protection for added reassurance.
  5. Encourage tailored financial advice for women:
    Advisors need to proactively engage female clients and offer tailored strategies to help close the gender pension gap.
  6. Raise awareness of the health and tax advantages
    Ensure retirees know that disclosing health information can improve rates and that annuities may be exempt from inheritance tax.

Steve Butler, Managing Director of Pension Potential and founder of National Annuity Day, said: “The survey highlights a clear mismatch between what people want in retirement and what they understand about how to achieve it. Many over 50s are seeking comfort, stability and predictability, exactly what annuities are designed to provide, but understanding of these products is low.

“This lack of knowledge, particularly amongst women, risks people missing the financial security they desire. By educating the public and supporting advisers, we can help people see annuities as a practical, low-risk way to boost retirement income. Closing this knowledge gap will help more people can achieve financial security and peace of mind in later life.”

For more information and free resources, visit: www.nationalannuityday.org.uk.

1Another post-pension freedoms record for annuity sales | ABI