Annuities explained

Discover our video series and learn how an annuity works.

Planning for retirement can feel overwhelming, especially when it comes to understanding your income options. Annuities offer a way to turn your pension savings into a guaranteed income for life—giving you security and peace of mind. But many people aren’t sure how annuities work, or whether they’re right for them.

That’s why we created Annuities Explained—a jargon-free video series designed to help you feel more confident about your retirement choices.

What the research tells us

We asked over 2,000 people through a YouGov panel about their views on retirement and financial security. Here’s what we found:

1 in 10 haven’t yet considered how they’ll manage their spending in retirement.
45% of UK adults aren’t saving anything towards their pension.
Many expect the state pension to be their main source of income.
21% think they’ll need to work part-time to top up their retirement income.
35% of over-50s say they want a “steady and stable” income in retirement.
24% want to be “always prepared” with a regular income and a reserve for bills and unexpected costs.

We saw some clear differences between men and women:

60% of women weren’t sure if annuities offer protection against inflation, compared to 43% of men.
Only 13% of women knew they could choose annuity options that increase income each year, compared to 26% of men.
27% of women didn’t know they could shop around for annuity products, versus 19% of men.
44% of women said they do not feel confident about their financial security in retirement, compared to 31% of men.

Why we made this series

We want to help more people feel informed and in control of their retirement planning. Our Annuities Explained video series breaks down the basics—from what annuities are, to how they’re calculated and how to buy one—so you can make decisions that work for you.

Watch our full annuities series

What is an annuity? | Annuities Explained /

What are the types of annuity? - thumbnail

What are the types of annuity? | Annuities Explained /

Annuity vs Drawdown | Annuities Explained /

UK annuity rates explained | Annuities Explained /

How is my annuity calculated? | Annuities Explained /

How do I buy an annuity? | Annuities Explained /

Meet Barry and John

Barry, planning his retirement

Barry is starting to explore what his retirement income options could be as he approaches 55. He used our annuity calculator and liked the look of the sort of income an annuity could provide but sat down with John to learn more.

John, our annuities expert

John has led the technical and regulatory team that supports L&G’s Retail Annuities business since 2019. He and the team make sure that all our annuity-related products and services, plus our Lifetime Care Plan, always stay in line with all relevant regulations.

"Better retirement outcomes begin with better understanding. When people are informed, they’re empowered to make choices that reflect their needs and values. We are passionate about helping people navigate their options with clarity, so they can build a retirement that feels secure and sustainable. These videos can improve customer understanding of annuities and help them to decide if they form part of a retirement solution for them."

John Graves
Head of Technical & Regulatory, Retail Annuities

Interested in our Pension Annuity?

Our Pension Annuity provides a guaranteed income for the rest of your life. Our Fixed Term and Cash-Out Retirement Plans (referred to by MoneyHelper as Fixed Term Annuities) provide a guaranteed income for a fixed term.

Learn more about annuities

Pension Annuity guides

Our annuity guides homepage brings together our helpful hub of annuity content to answer the most popular annuity queries.

Joint life annuity

How does joint life annuity work and what are the advantages? Find out more with our simple guide to understanding joint annuity pension.

What happens to an annuity when you die?

Learn what happens to your annuity when you die with Legal & General's simple to read guide.

Enhanced annuities explained

Learn about enhanced annuities and how your medical history could secure you a better annuity rate. Read our simple guide to find out more and improve your financial future.

Getting an annuity quote online

Learn all about annuity quotes and how to get an annuity quote in minutes with our helpful guide.

What are fixed term annuities?

A fixed term annuity pays a guaranteed retirement income for a specific period of time. We help you understand whether a fixed annuity is right for you.

Guaranteed annuity rates

A guaranteed annuity rate (GAR) is an annuity rate written into your pension policy that your provider has to offer you. We explore how GARs work.

What is an annuity?

What is an annuity? We explain what annuity means and if an annuity is a good idea for you.

How do annuities work?

Many people are looking for reliable ways of funding their later years. Perhaps you want to make sure the bills are covered for the foreseeable future. Maybe you’d like to fund those trips you’ve always dreamed of taking, or that hobby you’ve always loved so much. Or you might just want to top up your income when you switch to working part time.

Types of annuity

There are several types of annuity including fixed, variable, deferred and immediate. Find out which annuity type might be right for you.

Annuity vs drawdown – what's the difference?

Many of us have spent the last few decades planning and carefully saving for the things that are important to us, whether that’s life’s luxuries, our mortgages and bills, or our plans for the future. As we get older we might have different priorities, but our financial planning for retirement should be just as important.

What are the latest annuity rates?

Annuity rates in the UK have risen in the last few years. Is now the best time to buy an annuity? We look at what this means for your retirement income.

How much does an annuity cost; £100k, £300k and £500k pension pots

What annuity can you buy with a £30k, £100k and £500k pension pot? We look at these examples and more.

Guide to buying an annuity

Deciding that an annuity’s the right choice for you is only the beginning. You still need to look around, find the right one and then buy it. We’re going to give you some key pointers to help you do just that.

Try our simple, practical tools

Annuity Calculator

It’s simple to use, and provides a helpful estimate of your potential guaranteed income in retirement.

Retirement Income Calculator

Use our retirement income calculator to calculate how much income you might be able to get in retirement from using your pension pot.

Pension Tax Calculator

Taking some or all of your pension pot can feel like a reward for decades of hard work. But how much does it really cost and what do you need to look out for? Try our calculator to learn more.

Before accessing your pension pot

Do you want the security of a guaranteed income for life? Or is flexibility more important to you? Make sure you carefully consider your options and know what you want from your retirement.

Get more guidance or advice

Making well-informed decisions about how to finance your retirement is important so it’s worth shopping around and making use of the guidance and advice services available:

Retirement guidance

Pension Wise from MoneyHelper

The government’s free and impartial service, offering guidance to make money and pension choices clearer for over 50s.

To find out more or book an appointment online click below or call.

0800 138 3944

Monday to Friday, 9am to 5pm.
Calls may be recorded and monitored.

Speak with us

Our colleagues in Cardiff are always happy to answer your questions or tell you about our retirement income products.

0800 048 2446

Monday to Friday
9am to 5pm
We may record and monitor calls.

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.

0800 009 4011

Our team is available between 9.00am and 5.00pm, Monday to Friday. Calls may be monitored and recorded.

Meet our annuity experts

Joe Mclean

Senior Product Manager, Annuities

Joe manages our three guaranteed income retirement pension products – our Fixed Term and Cash-Out Retirement Plans, and our Pension Annuity. He makes sure they offer everything our customers need, are competitive in the marketplace and meet all relevant risk and regulatory requirements.

Nick Theobald

Product Technical Manager, Annuities

Nick’s been with us for his entire career, spending over 35 years helping our customers in many different ways. Since 2019, he’s been a Product Technical Manager focusing on annuities. Previously, he’s also worked as a Conduct Risk Monitoring Consultant, Senior Pension Specialist and Service Delivery Manager, among other roles.

John Graves

Head of Technical & Regulatory, Retail Annuities