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4 August 2026 last updated |
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| Retirement income up 29pc with soaring equities and high annuity rates |
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Retirement income is +29% higher thanks to soaring FTSE-100 index and record high annuity rates. |
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Retirement income is +29% higher in a year with soaring UK equity markets and record high annuity rates after geopolitical tensions from Trump tariffs and US-Iran war.
If you are planning to retire and are invested tracking the FTSE-100 index, the buying power of your pension fund has increased +29% from an income of £12,550 pa in July 2025 to £16,196 pa in July 2026.
Our data looks at the buying power of a £100,000 pension fund in July 2008 as the base year, then by tracking the FTSE-100 index and what income this can produce when buying an annuity over time.
In July 2008 during the financial crisis the FTSE-100 index was 5,411 increasing to 10,986 in July 2026. A portfolio tracking the index has increased about +103% over this time.
For
annuity rates a pension fund of £100,000 produced an income of £7,908 pa in July 2008, increasing to £7,977 pa in July 2026. This is based on our benchmark for a 65 year old purchasing a lifetime
annuity on a single life and level basis.
The buying power of a pension fund reached a low of £5,016 pa in October 2020 due to plunging equity markets and low annuity rates after the Covid pandemic and lockdown.
Since October 2020, the buying power of a pension fund has increasing 222% to £16,196 pa in July 2026 due to soaring equity markets and record high annuity rates. Therefore, now is a good time to buy an annuity and secure income with all or part of your portfolio.
Find related news here:
Annuities up 3.6pc to record high due to US-Iran war and inflation risk
Record high yields of 5.49pc with Trump strike threat and annuities rise
The 15-year gilt yields peaked on 15 May 2026 at 5.60% during the US-Iran war with the closer of the Strait of Hormuz preventing ships through with oil and fertaliser to countries such as Japan, Asia and India.
Annuity rates have remained at record highs since Donald Trump became President and imposed tariffs on all countries in 2025, right through to military strikes on Iran to force them to make a deal in 2026.
The chart below shows how the buying power of a £100,000 pension fund has changed over time with an increase and decrease in fund value and annuity rates, this is the income that could be generated.
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Benchmark annuity rates and FTSE-100 index |
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Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
| FTSE |
10,228 |
10,909 |
10,177 |
10,368 |
10,416 |
10,679 |
10,868 |
| Rate |
£7,680 |
£7,748 |
£7,831 |
£7,880 |
£7,953 |
£7,915 |
£7,977 |
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Fig 1: Chart comparing retirement income from 2008 to 2026 |
The above chart shows those invested with a fund of £100,000 in July 2008 could purchase an income of £7,908 pa. Today with a fund tracking the FTSE-100 index, higher equity markets and annuity rates at an eighteen year high you can purchase an income of £16,196 pa.
Annuity income is at a plateau reaching £7,895 pa in May 2025 and is only +1% higher over a year later at £7,977 pa. This income is based on our benchmark for a 65 year old with £100,000 purchasing a lifetime
annuity on a single life and level basis.
The majority of gains for retirement income is from rising equity markets. This is driven by many factors including geopolitical uncertainty, impact of inflation on economies, higher oil and gas prices and significant investment in artificial intelligence and associated technologies.
Central banks are unlikely to reduce interest rates in the short term and this will help to keep gilt yields higher for longer. The benefit is annuity rates remaining at the current high levels until the Bank of England gives an indication of lowering interest rates towards their 2% target.
For anyone retiring soon, the high equity markets and annuities make this an ideal time to lock-in secure income for your retirement using all or part of your portfolio.
You can use a purchased life annuity to secure income if you have cash in your bank where the majority of the income is deemed a return of capital and therefore tax free.
To find out how the record high annuity rates have increased your retirement income for your age, click this link annuity rates table.
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