Annuities

An annuity provides you with a guaranteed income (usually for life). You can take some or all of the tax-free cash from your pension first and then use some or all of the remaining money to buy an annuity (usually from an insurance company). The income you receive will be taxable, just like any other earned income.

Annuities at a glance

Finding the right annuity

There are many different types of annuities, so it’s good idea to shop around to find the best deal. You will also have some decisions to make as to what type of annuity is best for you.

  • Do you want an income that will remain the same or increase each year?
  • Do you want an income just for you or one that will pay to your spouse too if you pass away first?
  • Do you want to benefit from stock-market performance?
  • Do you want to buy an annuity for a fixed term and then review your options?
  • Would you benefit from an enhanced annuity which takes into account any existing health issues and may result in a higher income?
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The government's Pension Wise service offers free, impartial guidance to help you understand your options at retirement. You can access the guidance online at www.pensionwise.gov.uk or over the telephone on 0800 138 3944.

The value of investments can go down as well as up, so you may get back less than you invest. This information is not a personal recommendation for any particular product, service or course of action.