What is a Pension Annuity?
A pension annuity is a product that converts your pension pot into guaranteed regular income for the rest of your life, no matter how long you live. With a pension annuity, you'll know exactly how much you're getting, come rain or shine.
Our annuity calculator is a handy tool that will support you in gaining a better understanding of how much you could expect to receive from your pension with a Pension Annuity.
Why get a quote with Legal & General?
Help getting you the best deal
When you get a quote with us, we'll also check if there are better deals available. You'll also have the option of seeing who's offering this by visiting our partner website Annuity Ready.
- A fixed or increasing income
You can choose a fixed income that always stays the same or set your income to increase every year to help you keep up with inflation. It can increase by a set percentage or in line with the Retail Price Index (RPI). It’s worth remembering that the higher the increase you choose, the lower your starting income will be. - Payment options
You can choose monthly or yearly payments and you can select to be paid at the start (in advance) or at the end (in arrears) of the month or year you’ve selected. - Guaranteed minimum payment period
You can guarantee to have your income paid for a certain amount of time – up to 30 years – once your annuity starts. If you die during this time, we’ll continue to pay your income to anyone you choose until the end of this period. - Choose to protect all or part of the amount used to buy your annuity.
When you die we'll pay a lump sum for the amount protected, minus any income payments already made. You can protect 25%, 50%, 75% or 100% of the original amount used to buy your annuity. - Options to support your dependants
You can continue to have your payments paid to a loved one after you die by choosing either 50%, 67% or 100% of your income.
If you have any medical conditions or lifestyle risks then you could get a higher income, with an ‘enhanced annuity’. When getting a quote online there is a section to capture these details. This also applies to your partner and could mean you receive a higher income.
When providing your information it’s important to share accurate personal health information with us, as this may help provide you with a higher income. We may ask for a report from your doctor to confirm information you've given us. Your income may be changed if we find the report doesn't match your application.
- Once agreed, it can't be changed
You'll need to be certain of the choices you make - there's no going back once the cancellation period ends and your Pension Annuity has started. - Tax-free cash
You can take up to 25% of your pension pot as tax-free cash. If you don’t take the tax-free cash at the start of your plan, you can’t take it later. - Your income is taxable
Income above your personal allowance is taxable. It may also affect any means-tested benefits you might receive. The amount of tax you pay on income from the plan will depend on your circumstances, and may change based on your income tax rate. - No cash-in value
The Pension Annuity can’t be cashed in or surrendered. - You may get back less than you paid
Depending on how long you live and the options you choose, you may receive less in income payments than the amount of the pension pot you used to buy the Pension Annuity. - Inheritance Tax
Death benefits from a pension are generally exempt from Inheritance Tax where the pension trustees have discretion over who receives them. However, there are some scenarios where Inheritance Tax may still apply.
If you need additional support you might want to consider pension guidance or advice.
Retirement income products compared
Choice of guaranteed monthly income | ||||
Income guaranteed for life | ||||
Can change monthly income | ||||
Exposed to market risk | ||||
Lump sum at the end | ||||
Not sure if a pension annuity is right for you?
Expert advice can give you peace of mind that you’re making the most of your money. We will:
- Talk you through all of your pension options, including annuities.
- Research products from different providers and offer recommendations.
- Help prepare your retirement finances so you can retire with ease.
Take the first step to your ideal retirement today.
0800 009 4011
Lines open Monday to Friday 9am to 5pm
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The choices you make may affect your income for the rest of your life, and you can't change your options later. We strongly recommend seeking financial guidance or advice.
Pension Wise is a government service from MoneyHelper that offers free impartial pension guidance. Available if you're 50 or over, you should consider having a free Pension Wise appointment, before you decide how to access your pension.
Pension and retirement advice from Legal & General’s team of expert advisers. If you’re aged 55 or over and want to access your pension our advisers can give you advice that’s tailor-made for you, so you can be confident you’ve made the best choices for your future. The first no-obligation call is free.
Get a quote
We can give you an online quote if...
Always compare what we can offer with what's available from other providers, as they may have more appropriate products or be able to offer a higher retirement income.
We can't give you an online quote if...
If any of these apply to you, call 0808 304 9447. We may record and monitor calls.
Quote and apply for Pension Annuity
We aim to make this process simple, clear and jargon free.
Common annuity questions
'Pension' could be used to refer either to the amount that you have saved in your pension pot through private or workplace pensions, or to the state pension, which is paid by the Government.
A pension annuity is a product that you can buy with your pension pot, which guarantees to pay you an income for the rest of your life.
Guidance helps you to identify and narrow down your choices in an impartial way. It won’t tell you what’s right for you but will explain your options and provide information so that you can choose what you want to do.
Advice considers your personal and financial circumstances and recommends specific products or actions to be taken that helps you achieve your goals.
There are lots of different types of annuity to choose from. And some have benefit options available too. You can learn more in our ‘Types of annuity’ article.
We only sell lifetime and enhanced annuities.
An enhanced annuity is an increased income that you could get, if you have any medical conditions or lifestyle risks. You'll need to answer some medical and lifestyle questions to see if this applies to you. You can learn more in our enhanced annuities article.
If you apply for a Pension Annuity, you have 30 days from the date you receive our confirmation that your annuity has started to change your mind. If you do not take this opportunity to cancel, your annuity will continue for the rest of your life.
There are options you can choose when buying an annuity that guarantees some money goes to your loved ones when you die. You can learn more in our article 'What happens to annuities when you die?'.
From 1 June 2022, the Financial Conduct Authority now requires pensions providers to refer customers to Pension Wise guidance and explain the nature and purpose of this guidance, when they decide to access their pension savings.
Pension Wise from MoneyHelper is a free and impartial Government pension guidance service.
Your decision about which options to choose is likely to be influenced by many factors, such as how much income or cash you need now and in the future. You should also consider your personal circumstances and the impact that your choices may have on taxation, State Benefits, Annual Allowances and any dependants.
Annuity articles
Need some help?
Making well-informed decisions about how to finance your retirement is important so it’s worth shopping around and using available guidance and advice, before you buy:
Retirement guidance
Pension Wise from MoneyHelper
The government’s free and impartial service, offering guidance to make money and pension choices clearer.
To find out more or book an appointment online click below or call.
0800 138 3944
Monday to Friday 8am to 5pm.
Calls may be recorded and monitored.
Retirement advice
Retirement Advice Service from Legal & General
Our advisers are experts in retirement regulated by the Financial Conduct Authority, so you can trust them to provide impartial advice and a personal recommendation that’s right for you.
0808 304 9155
Monday to Friday 9am and 5pm.
Calls may be monitored and recorded.
Speak with us
Our colleagues in Cardiff are always happy to answer your questions or help you apply for a quote.
0808 189 9551
Monday to Friday 9am to 5pm.
Calls may be monitored and recorded.