What is our Pension Annuity?

It’s a lifetime annuity you can buy using the money from your pension pot. It will pay you an income for the rest of your life.

It may be suitable for you if:

  • You are over age 55.
  • You want an income payable for your lifetime.
  • You want your dependant to receive an income if you die before they do.
  • You don’t want your pension pot to be subject to any investment risk.

It may not be suitable for you if:

  • You’re not sure about committing your pension pot to a fixed income for life.
  • You want flexibility to change any of the options you initially choose.

What is an enhanced Pension Annuity?

Your income could be higher if you or your partner have certain lifestyle health risks, or have been diagnosed with a more serious medical condition(s).

What are the options?

There are several options available so you can tailor your annuity to suit your needs. The options you choose will affect the level of income payable.


Tax-free lump sum

Take up to 25% of your pension pot as a tax-free lump sum. If you don’t take it at the start of your annuity, you won’t be able to take it later. 

Income options 
  • Fixed income – the same amount each year for the rest of your life.
  • Increasing income – the income will increase by a fixed percentage each year for the rest of your life.
  • Inflation proof – the income will increase in line with the Retail Prices Index (RPI) each year for the rest of your life (this option is not available if you qualify for our enhanced Pension Annuity).
Dependant's income

Pays your spouse, registered civil partner or financially dependent partner an income of up to 100% of yours, after you die.

Guaranteed minimum payment period

A term of up to 30 years from the date the annuity starts, with a maximum age at the end of the period of 100. This means that if you're above age 70, the longest period you can choose will need to be lower than 30. If you die during the guaranteed minimum payment period, your income payments will continue to your estate or nominated beneficiaries at the same level. If you choose this option, your starting level of income will be lower. The longer the period you choose, the lower your income will be. 


Monthly, quarterly, every six months or every year, either:

  • In advance – at the start of the payment period; or
  • In arrears – at the end of the payment period.

Important things to consider

  • Buying our Pension Annuity is a once and for all decision. The options you select when you buy the annuity cannot be changed later on.
  • The annuity cannot be cashed in or surrendered at any time.
  • If you buy a level annuity, inflation will reduce the buying power of your income over time.
  • Annuity payments are classed as income and are subject to income tax, and could affect any State Benefits you claim.
  • Depending on how long you live, you may receive less than you paid for your annuity.
  • If you have any medical conditions or lifestyle health risks, an enhanced pension annuity may be more suitable.
  • It’s important to ensure any medical and/or lifestyle information you give us is both accurate and complete so we can pay you the maximum level of income you’re entitled to.
  • We may request a report from your doctor after your income starts to check any medical and/or lifestyle information you've given us. Your income may be adjusted if we find the report doesn't support what you've told us.

What about tax?

Your next steps

Or take a look at

Our Retirement Income Calculator that allows you to quickly see what income you might expect from Legal & General's range of retirement solutions.

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You can, at any time, request an online quote for any of Legal & General's retirement plans.