Pension Annuity

A pension annuity is a product that converts your pension pot into guaranteed regular income for the rest of your life, no matter how long you live. With a pension annuity, you'll always know exactly how much you're getting, come rain or shine.

That's not the case with other retirement income options, which makes annuities one of the most reliable ways to finance your retirement. For more on how they work, visit our What is an annuity? page.

There are a few different annuity options to consider following your quote: 

• Lifetime annuity: This is another name for a standard pension annuity, which regularly pays you a guaranteed sum for the rest of your life. They usually end when you die unless you've selected death benefits such as a guaranteed minimum payment period or value protection.
• Joint lifetime annuities: These regularly pay you a guaranteed sum for the rest of your life, then pay out to a spouse, civil partner or financially dependant partner if they outlive you.
• Enhanced annuities: These pay out at a higher rate than standard annuities. They’re usually for people with particular health or lifestyle issues.

You can find out more about these and other options in our Types of annuity article.

Our annuity calculator is a handy tool that will help you see how much you might get from your pension with a pension annuity and how that could change depending on when you buy it.

And finally, we should mention a key tax point:

• You’ll have to pay income tax on any payments from your annuity. The exact amount due will depend on your circumstances.