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Annuities

Understand your pension income options
Chat to us on 0800 032 9124

Lines open: 8.30am to 6pm Monday to Friday

What is an annuity?

If you value the reassurance of knowing you'll receive a guaranteed income every year for the rest of your life, without taking any investment risk, an annuity may be the right product for you.

An annuity pays a guaranteed income for the rest of your life (however long you live). If you suffer from a medical condition or lead a lifestyle that could shorten your life expectancy you could boost your income further (this is called an enhanced annuity).

Options you can add to your annuity;

  • Spouse's pension - You can arrange for part or all of your annuity income to continue to be paid after you die to your spouse or partner (or other beneficiary).
  • Death benefits - The money you paid for the annuity (less any payments made before you died) can be payable on your death or income payments can be guaranteed for a fixed term from the start date of the annuity (say 5 or 10 years).
  • Inflation - Your income can increase each year to protect against inflation. You can choose a fixed percentage (say 3%) or an index i.e. Retail Price Index (RPI).

Income calculator

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Use our free calculator to get an idea of what your retirement income could be.

Advantages of an annuity

  • A guaranteed income for life
  • Income can continue to your partner or spouse after you die
  • Lump sum death benefits available
  • Option to protect your income against inflation

Disadvantages of an annuity

  • If you die shortly after the plan starts you may not receive full value
  • No flexibility to vary income
  • You can't take money out (other than the income payable)
  • Potentially better returns available from other products

Things to consider about annuities

  • These days, you have greater flexibility and you don't have to
    buy an annuity, however it is currently the only way to provide a guaranteed income for life.
  • There are different types of annuities and it’s important to get the right one to make the most of your money. For example, if you’re ill, smoke or not physically fit, you could get an enhanced annuity and increase your retirement income.
  • You can't normally change the basis of your annuity, cash it in or transfer your annuity.
  • If the Government changes the way annuities are taxed, the income paid to you may fall.
  • You don’t need to have a medical examination.

Have a commitment free chat with a Pension Specialist

Call us on 0800 032 9124

TextDirect: First dial 18001

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Lines open: 8.30am to 6pm Monday to Friday. We may record and/or monitor calls for training and audit purposes.

Got a question?

Call our UK call centre.

0800 756 8020

Lines open: Mon to Fri 8am - 9pm Sat 8am - 5pm Sun and Bank Holidays 9am - 5pm.

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How much will I get?

The annuity rate you receive will depend of a number of factors, including:

  • Pension pot size
  • Your age
  • Flexible options you select
  • Any advice fees you pay
  • Current annuity rates
  • Your health and lifestyle
  • If you take tax free cash
  • Any tax you need to pay

To get a better idea of your income at retirement, try our Pension Income Calculator, or for an accurate annuity quote, our Annuity Calculator.

Annuity FAQ's

Find answers to all your annuity questions with our frequently asked questions section.

Retirement advice

Chat to one of our pensions specialists today and see how we can help you find the best income for your pension. We can:

  • Give advice on all types of pensions
  • Maximise your pension income
  • Help you make the best possible use of your hard earned savings

Retirement Guidance

For guidance on your defined contribution pension we recommend Pension Wise, a free government service offering impartial guidance on your pension options.

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To book an appointment call 0800 138 3944 8am to 10pm everyday

Pension Wise won't recommend any products or tell you what to do with your money.

More information to help you prepare to retire