Is a Pension Annuity right for me?

You’ll need to buy an annuity if you want to turn your pension fund into an income for life.

Buying an annuity is an important one-off decision and you will literally have to live with the income from your annuity for the rest of your life. You won’t be able to change any of your chosen annuity options at a later date.

You may wish to consider our Pension Annuity if:

You want to fix your income and prefer to take less risk.

Your attitude to risk may go some way to determining the sort of annuity you buy, especially if you’re naturally cautious with your money and you would prefer lower risk. 

Our Pension Annuity helps you to plan for your future with the certainty that your income will never fall. You receive a known level of income for the rest of your life without having to worry about investment performance and its effect on your income.

You want to counter the effects of inflation.

When you buy our Pension Annuity you can choose to have your income increase each year to help guard against the effects of inflation. Inflation could reduce the value of your income over time, so you can choose for your income to increase by a fixed percentage each year or to increase in line with the Retail Prices Index (RPI), a widely-used measure of inflation. 

The larger the annual increase you choose the lower your starting income, but the more likely it will maintain its current worth.

You want to provide for your partner after you die.

Pension annuities pay you an income for as long as you live but will normally stop being paid when you die. So when you buy yours you may want to include:

• a spouse’s, registered civil partner’s or dependant’s income - paid after your death for the rest of their life,
• a guaranteed payment period - during which your income will continue to be paid even if you die within that period.

These death benefit options are available with both our Pension Annuity and With Profits Annuity.

You have one or more health risks or conditions.

If you suffer from a qualifying health risk or condition you could qualify for extra income from your annuity. Depending on the severity of your condition(s), your income could be up to 40% higher.  

Our decision on extra income is based on your health at the time you buy and we won’t be able to increase your income if your health worsens at a later date. 

RPI increases are not available on our Pension Annuity where extra income has been provided because of your health.

Summary

The table below summarises the main features of our Pension Annuity as compared to our With Profits Annuity:

	Can income fall?	Investment linked?	Enhanced terms if in poor health	Optional guaranteed payment period	Choice of automatic increases	Optional income for dependant
Pension Annuity	X	X	√	√	√	√
With Profits Annuity	√	√	X	√	X	√

If you’re unsure whether our Pension Annuity is right for you, it may help to read our With Profits Annuity - is it right for me? page.

You can choose to buy an annuity, which is part Pension Annuity and part With Profits Annuity.

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