New Customer? Speak to your financial adviser or financial intermediary
What is an annuity?
You can use some or all of the money in your pension plan to buy an annuity. An annuity will provide you with a guaranteed regular income for the rest of your life so you'll have the peace of mind knowing that it won't run out before you die.
The amount of income you'll get depends on various factors, these include:
Your age
The amount of money in your pension pot
Your health and lifestyle
Any options you choose as part of your annuity (such as an income that increases over time)
When you reach 55 (57 from 6 April 2028) you can usually take 25% of your total pension pot tax-free then use the rest to buy a guaranteed income for life. If you prefer, you don't have to take the tax-free lump sum and can use your whole pension pot to buy an annuity instead. Keep in mind that the guaranteed income you get may be taxed.
Laws and tax rules may change in the future. Your own circumstances and where you live in the UK also have an impact on tax treatment.
Is an annuity right for me?
You can tailor your annuity to make sure your guaranteed income is right for you.
Depending on the options you choose on your annuity, this will reduce the amount of income payable. Remember, you won't be able to change your mind later.
The Standard Life Pension Annuity may be right for you if you:
Want a regular, guaranteed lifetime income
Would like the option of having your income increase each year, either in line with inflation or by a fixed rate
Would like the option to provide a lump sum or a regular, guaranteed lifetime income for a dependant when you die
Would like to avoid your retirement income being impacted by investment risk
Are happy to accept that you can’t change or cash in your annuity once it’s been set up, even if your circumstances change
Are happy to accept that the total income you receive over the life of your annuity may be less than the total amount that was used to buy it
Live in the UK
The Standard Life Pension Annuity may not be right for you if you:
Have less than one year to live
Have less than £10,000 in pension savings
Would like the freedom to make changes to your retirement income payments, such as taking additional lump sums
Would like to keep your pension savings invested so you can potentially benefit from future investment growth
Would like your dependant to benefit from any remaining savings in your pension pot when you die, without having to buy additional guarantees or protection
Are happy to accept that your pension savings could run out before you die
Have declared bankruptcy and the fund value of your pension plan has been earmarked to settle some or all of the outstanding debts
Not quite ready for a lifetime commitment?
Explore the benefits of a Standard Life Guaranteed Fixed-term Income.
You can choose a guaranteed income for between 3 and 25 years, plus a range of optional features to help tailor your income to meet your needs.
We recommend you seek appropriate guidance or advice before you make any decisions. You can also get free impartial guidance over the phone or face to face from the age of 50 with Pension Wise a service from MoneyHelper. Go to moneyhelper.org.uk/pensionwise or call 0800 138 3944
If you want to use a financial adviser, you should always make sure they're authorised by the Financial Conduct Authority (FCA).
Contact your financial adviser or financial intermediary. If you don't have one please read our financial advice page.
Important information about pension annuities
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It's important to shop around and compare providers as you might get a better retirement income.
When you reach 55 (57 from 6 April 2028) you can usually take 25% of your total pension pot across all pension plans, tax-free. You can then use the rest to buy a guaranteed income for life. If you prefer, you don't have to take the tax-free lump sum and can use your whole pension pot to buy an annuity instead, but any income is subject to tax.
Tax rules and legislation may change and your own individual circumstances, including where you live in the UK, will have an impact on your tax treatment. Tax will be deducted from your income before it is paid.
Pension drawdown allows you to take a flexible income or lump sums from your pension plan as and when you need to. You can stop, start, or change this at any time and the rest of your pension pot stays invested so it has the potential to grow in value.
Remember, as your money remains invested, its value can go down as well as up and you may get back less than what you paid in. This means that if markets suddenly go down, then continuing to withdraw the same amount can have an impact on the future value of your pension pot.
Annuities, on the other hand, give you a guaranteed income for life. Pension drawdown doesn't provide this, meaning your pension pot could run out. So you need to carefully plan the amount you choose to take and regularly review your investments. However, once you're in drawdown, you can opt to buy an annuity at any time.
Once your annuity has been set up you can't change it or cash it in.