Securing a guaranteed income

If having a guaranteed income for life free of investment risk is what you’d like, then a pension annuity could be for you.

You exchange some or all of your pension savings for a type of insurance policy, called a pension annuity, which provides a regular income. Currently annuities are the only way to provide a guaranteed income in retirement that lasts as long as you do.

With any big purchase it is important to understand your options and shop around for the best deal. Pension annuities are no different. There are different types of annuities and a number of options enabling you to tailor an annuity to meet your personal needs.

Some annuity providers offer ‘enhanced’ annuities. These take your health and lifestyle into account when determining the income you will receive. These can arise from fairly common factors like:

  • smoking
  • having high cholesterol, or 
  • being overweight,

up to more serious or life-threatening conditions such as:

  • cancers, and
  • heart disease.

Your income will not go down as a result of medical information you give. You may be able to increase the income available to you if your health position is taken into account and you qualify for an ‘enhanced’ annuity. You should check that this information is being taken into account when obtaining quotes for your annuity.

Use our free online annuity comparison service to do some of the legwork for you.

We offer lifetime annuities from a wide panel of annuity providers. These providers are Aviva, Canada Life, Hodge Lifetime, Just, Legal & General, Retirement Advantage and Scottish Widows. We offer enhanced annuities that will take your health into account when offering an annuity.

Annuity advantages Annuity disadvantages

Provides a fixed income for life no matter how long you live.

Buying a pension annuity is currently a ‘one-off’ decision that cannot be changed. So you need to be sure about the choices you make (including the features of your annuity) before you commit.

No investment risk.

No opportunity to benefit from investment growth.

You can choose to guard against inflation.

Adding features to your annuity can reduce the amount of income it provides, and once your payments have started these features cannot be added or changed at a later date. 

If you wish to do so, you can ensure your loved ones are provided for after your death.

Poor health, lifestyle and where you live can generate more income.



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