Annuities Explained

A level annuity pays a fixed income that stays the same throughout your life.

While this provides certainty, it doesn’t account for inflation, meaning the real value of your income may reduce over time.

Escalating annuities increase your income each year by a fixed percentage.

This helps your payments keep pace with the rising cost of living, although starting income is typically lower than with a level annuity.

An inflation-linked annuity is designed to rise in line with an official measure of inflation, such as the Retail Prices Index (RPI) or Consumer Prices Index (CPI).

This option offers protection against the impact of inflation, ensuring your purchasing power remains steady throughout retirement.

If you have certain health conditions or lifestyle factors, such as smoking, high blood pressure, or a serious medical diagnosis, you may qualify for an enhanced annuity.

This can provide a higher income based on a lower life expectancy. We can help assess your eligibility as part of our pension advice service.

A lifetime annuity provides a guaranteed income for the rest of your life, regardless of how long you live.

This is a popular option for those who want the security of knowing their income will never run out.

A joint life annuity pays an income to you for life and then continues to pay a proportion of that income to your spouse or partner after your death.

This option can provide ongoing financial security for loved ones.

A short-term or fixed-term annuity provides a guaranteed income for a specific period, such as five or ten years.

At the end of the term, there may be a lump sum payment, which can offer further flexibility in your approaching retirement options.