Buying a pension annuity converts your pension savings into a regular income, usually for the rest of your life.
If you have a private pension or ‘money purchase’ company pension you’ll be able to take some of the cash you’ve accumulated as a tax-free lump sum, typically up to 25%. All or part of the rest can then be used to buy your annuity.
Annuities at a glance
You can buy a conventional annuity from the age of 55
Once you have bought an annuity it is not possible to change your mind
It’s important to consider all choices, not just the highest rates, to ensure your annuity suits your circumstances
Any income generated is added to any other income and is taxed accordingly
Rates vary by annuity provider and income from an annuity can vary according to
The size of your pension fund. Some providers offer better rates for people who can invest large amounts
Your age. The older you are the more income you will get each year