• My annuity gives me a guaranteed income

  • Annuities

    If you want a guaranteed income for life when you retire, an annuity might be a good option to consider.

  • An annuity is a guaranteed, regular income which you purchase from an insurance company using your pension fund. The insurance company is then responsible for paying you an income for at least the rest of your life.

    There are many different types of annuity, each designed to suit different personal circumstances. A free online annuity planner is available at www.pensionsadvisoryservice.org.uk which can help you decide which type of annuity is right for you.

    You will need to make some choices about the type of annuity you want to buy. There are lots of different types on the market, and annuity rates vary quite a lot. We recommend you talk this over with a financial adviser.

    It’s an important decision, as once you’ve bought an annuity, you can’t change your mind even if your personal circumstances change.

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    Things to consider when buying an annuity

    The regular income you get from an annuity can be affected by a number of different factors, these include:

    • Age – The older you are when you set up your annuity, the higher the regular income you’ll get. This is because your annuity needs to last for a shorter period.
    • The options you choose – If you add a spouse to your annuity, your money may have to last for longer once you die, meaning you’ll receive a lower regular income. You can also choose to guarantee your payments for a set period, e.g. 10 years. This means that should you die within the initial 10 year period, your annuity will continue to pay out for the remainder of the term. If you choose to protect your annuity against the rise of inflation you will receive a lower regular income initially.
    • Your lifestyle* – If you smoke then your life expectancy is shorter and therefore you’ll receive a higher regular income from your annuity.  This is because your annuity needs to last for a shorter period.
    • Your health* – If you suffer from any pre-existing health conditions that affect your life expectancy then you may get a higher regular income from your annuity. This is because your annuity needs to last for a shorter period.

    *These factors are only considered by providers of so-called lifestyle, or enhanced annuities. The amount you receive could be substantially higher than you’ll get from a provider that doesn’t consider these factors. 

  • Need a financial adviser? You can use unbiased.co.uk to find one local to you.
  • Because we are not a specialist annuity provider, Legal & General Assurance Society Limited have agreed to become our chosen annuity provider. Legal & General is a provider of some of the most competitive annuity rates in the UK. If you have health or lifestyle issues that could reduce your life expectancy, they may also be able to offer you an annuity providing a higher income. We do not offer such annuities.

    Whilst we are confident that Legal & General will be able to provide you with better annuity terms than we can, it is not guaranteed that their annuity will be the best annuity for you. You should shop around and see what other providers can offer you using your pension fund. When it comes to choosing the right annuity we recommend you speak to your financial adviser.

    When you request an annuity quote from us we’ll compare the rates available from both ourselves and our chosen annuity provider, Legal & General. We’ll then send you the quote from whichever company offers you the best deal. You’re free to accept the quote we send you, or choose an annuity from someone else.

    Call us on 0345 129 9993 to get an annuity quote or to find out more about the annuities on offer.

  • Other useful information to help you

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    View Pension Benefits Guide

    Find out about other retirement options with our Pension Benefits Guide.

     

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    Your Pension – It’s Time to Choose

    Download the Your Pension - It's Time to Choose factsheet from the Money Advice Service.

     

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    Get help with retirement

    If you'd like to find out how you can find help with retirement planning.

     

  • Please bear in mind

    Choosing a retirement income option is a big decision so we recommend that you get guidance or advice to help you to understand your options.

    Pension Wise is a government backed service available to anyone over the age of 50. The service is free and provides impartial guidance appointments over the telephone and/or face to face to help you to understand your options at retirement. It can offer you:

    • guidance on your pension options and how to make the best use of your pension pot
    • information about tax when taking money from your pension pot
    • tips on getting the best deal, including how to compare products, get financial advice and avoid scams

    We recommend you visit the Pension Wise website at www.pensionwise.gov.uk to find out what the service offers and to begin to understand the options available to you. To book a telephone or face-to-face appointment you can visit the Pension Wise website or call 0800 138 3944.

    In addition, you should visit www.moneyadviceservice.org.uk to access their ‘Your pension – it’s time to choose’ guide and other useful retirement tools.