The war in the Middle East may be putting a few extra pence every day on a litre of fuel, and be keeping business and political leaders awake at night… but one corner of the retirement income sector looks set to benefit. So what does it mean for current and future retirees?

Some experts are predicting that annuity rates could soar in 2026 amid market unrest – making this a timely moment for anyone currently considering their options to seek advice.

This comes after annuities have already been enjoying a positive 12 months: average annual annuity income rose by £60 on a £50,000 investment, according to analysis from Moneyfactscompare.co.uk – standing at £3,558 now, up from £3,498 in March 2025 (based on an annuitant aged 65 buying a single life level without guarantee).

Moneyfacts point out the traditional linkage between annuity rates and gilt yields… and 10-Year Gilt Yields had surged to 5.01% as of 27 March 2026 – well up from approximately 4.31% at the start of the month.

A boost to a regular income

So how will this affect the prospects for new annuitants?

Rachel Springall, Finance Expert at Moneyfacts.compare.co.uk said: “Pensioners looking to secure an annuity for a regular income could see a boost to the rates on offer in the weeks ahead.

“Due to the unrest in the Middle East, retirees may want to focus on protecting their current pension arrangements from stock market volatility but also adopt a ‘wait and see’ stance for providers to review their pension annuity rates, due to rising gilts.

“Ten-year gilts have been rising over the past few weeks, hovering around the 5% mark. Rising gilt yields have been known to cause annuity rates to soar. If this comes to fruition, it could mean retirees become hundreds of pounds better off.

“During 2022, annuity rates shot up amid interest rate volatility and stock market uncertainty, so much so, that someone who took annuity income in December 2022 versus the start of that year was around £900 per year better off on average.”

She goes on to counsel caution, however.

“Seeking advice before making any rushed decisions is wise: no one knows how long the unrest will last.

“Circumstances can change, such as a deterioration of health or a change in someone’s risk preferences, so an annuity may be a suitable option to provide a guaranteed income during retirement.

“Those who may want a bit of flexibility could also choose part annuity and drawdown. Escalating annuities are also becoming more popular, as the Association of British Insurers (ABI) revealed a 10% rise in sales of these types during 2025, versus a year prior.”

Check out the impact of annuities on YOUR future income

If you want to see what impact putting an annuity into your portfolio would have, relative to other forms of savings and investments, you can see at a glance using the RetireEasy LifePlan.

Moreover, you can test out the differences that the various types of annuity would make by running a series of different scenarios – showing, for instance, how an escalating annuity would affect your annual income and even test that against a variety of projected inflation rates.

All this for just a few pounds a month!