You don't have to buy an annuity from your pension provider and it often pays to shop around. Call us for a quote and see how we compare.

Best mainstream annuity provider winner, Moneywise pension awards 2014

Annuities FAQs.

What is a pension annuity?
A pension annuity converts the funds built up in your pension scheme, into a regular income. The income is payable for the rest of your life and will be subject to income tax.

If you’re lucky enough to be in a salary related (‘defined benefit’) scheme then the chances are your scheme will provide you with your pension income. However, if like the majority of people, you’re in a money purchase (‘defined contribution’) scheme, then you will need to use your pension fund(s) to buy an annuity to provide your pension income.

Enhanced rates and income are available on our Pension Annuity.
What is an enhanced annuity?
An enhanced annuity is a pension annuity benefiting from improved annuity rates and therefore offering a higher pension income. If you suffer or have suffered from certain medical conditions and/or lifestyle health risks then you may qualify for extra income.
Do I have to buy a pension annuity from my current pension provider?
In the majority of cases you won’t have to buy your pension annuity from the same provider you have your pension fund with. You can shop around as not all providers offer the same pension annuity products and each calculates their own annuity rates.

Shopping around for your annuity (commonly referred to as taking the Open Market Option) could enable you to obtain a higher pension income.
Why should I choose to buy my annuity from Legal & General?
The Legal & General Group, established in 1836, is one of the UK’s leading financial services companies. As at 30 June 2014, we were responsible for investing £467 billion worldwide on behalf of investors, policyholders and shareholders. We also had over 7.9 million customers in the UK for our life assurance, pensions, investments and general insurance plans.

Legal & General is a long established provider of pension annuities. We have more than 772,000 pension customers. In the last 12 months we have paid our customers over £1.4 billion in pension income.
How will I know what to do?
Assuming you’re not looking to take your pension benefits early, your existing provider should write to you no later than four months before your selected retirement date detailing the options available.

You can then request an illustration to get an idea of what benefits you could expect if you were to buy your pension annuity with them.

The illustration will also give you the value of the pension fund if you were to take the Open Market Option. You can then contact other pension annuity providers to get a comparative quote to see what they can offer you.

Annuities are typically bought with the proceeds of money purchase pension schemes. But where a Final Salary scheme does not provide a pension income direct from the scheme, the Trustees of the scheme may instead purchase an annuity on behalf of the scheme, to pay your income.

If you're not sure what to do, then we recommend you speak to a financial adviser.
Do I need to stop working before buying a pension annuity?

No, you don’t have to stop working to start taking your pension benefits. However, if you’re in a company pension you may need to check what the scheme rules will allow. The earliest you can normally buy a pension annuity is currently age 55.

What should I think about before buying a pension annuity?
Buying a pension annuity is a very important decision; not least because once you’ve bought it and the cancellation period has expired you can’t change your mind.

You need to be sure that what you’re buying is right for you, as you may need to rely on the income it provides you with for many years to come.

Because of the importance, you may wish to speak to a financial adviser.
Can I buy a pension annuity without going through a financial adviser?
You can buy our Pension Annuity direct from us. If you know what you want you can speak to a member of our Annuity Solutions team. They can provide you with a quote and, where appropriate, an application pack.
Does my pension fund have to be a certain size to buy a Pension Annuity from you?

Yes. If your pension scheme is with another provider then the minimum pension fund we will accept is £1,000 (after payment of any tax-free cash lump sum).

Can I use savings (outside of my pension fund) to buy an annuity?
Yes. Any amount of savings you use will be treated as a personal contribution for immediate retirement and you'll normally still be entitled to take a tax-free cash sum of up to 25% before your annuity payments start.

Provided the total of all your gross contributions paid to all your pension schemes in the current tax year don't exceed the greater of £3,600 or your relevant UK earnings (including salary bonus and overtime), then we can accept your contribution and add basic rate tax relief to it before using the total to buy your chosen annuity.

Any contributions over the current 2014/2015 Annual Allowance (set by HM Revenue & Customs) of £40,000, could be subject to a tax charge. There are circumstances when you can contribute more than the Annual Allowance. For more information please speak to a financial adviser.

The Annual Allowance also applies to increases in salary related schemes.
What happens if I change my mind?

If you apply for our Pension Annuity, you have 30 days from the date you signed our application form to change your mind. You won't then be able to cancel or change your annuity payments.

Where will my income be paid?
Your income will normally be paid into your UK bank or building society account. You must be named as either the account holder or joint account holder. All payments will be made in British pounds sterling (GBP).  

We can arrange for payments to be made to an overseas account if requested, but there will be a charge for converting your payment from sterling to the required currency. The charge will be deducted from each payment instalment.

Call us for a quote

0800 048 0302

Monday to Friday, 9am to 5pm

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