Guaranteed income at a glance



You get peace of mind because you’re guaranteed the income you’ve arranged. Annuity rates are low at the moment, so you may not get as much income as you expect right now.
You can make plans for the future knowing how much income you’ll have. It can take many years for the payments from an annuity to add up to more than the pot of money you had saved up in your pension pot.
It’s possible to provide an income to your spouse or partner or leave any surplus to your loved ones. Providing an income to your spouse or partner or leaving any surplus to your loved ones may mean your income will be lower.
Even if you live past 100, you could still have an income Most annuities aren’t flexible. Once you’ve bought one, you have to stick with it – even if your situation changes.
Your payments are protected by the Financial Services Compensation Scheme, so you’ll keep receiving them even if the company paying them runs into difficulties. Unless you choose an increasing income the amount you receive will remain the same each year. With the effects of inflation, it will buy less as the years go by.
You can combine guaranteed income with other types of retirement income. Unless you choose an investment-linked income, you won’t benefit from economic or stock-market growth.

Finding the right guaranteed income

As there are many different types, it’s a good idea to shop around for the best deal. You’ll also have to consider what type 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 go to your spouse or dependants if you pass away first?
  • Do you want to benefit from stock-market performance?
  • Do you want to buy an income for a shorter fixed term and then review your options?
  • You could benefit from a higher income that takes into account any existing health issues you may have.

The value of investments can go down as well as up, so you may get back less than you invest. Tax treatment and eligibility to invest in a pension depend on personal circumstances. All tax rules may change in future.

This information is not a personal recommendation for any particular product, service or course of action. Pension and retirement planning can be complex, so if you are unsure about the suitability of a pension investment, retirement service or any action you need to take, please refer to an authorised financial adviser.

Pension money cannot normally be withdrawn until age 55.