What is an annuity?
An annuity is one of the only ways of providing a secure income from your pension.
You can exchange some, or all, of your pension with an insurance company for an annuity. In return, you’ll receive a guaranteed income for life. The amount of income you receive will depend on the value of your pension, your circumstances and the options you choose. Learn about your annuity options.
Your annuity will last regardless of how long you live, or what happens to the stock market. However once set up, an annuity usually can’t be changed or cancelled, so it’s important to choose your annuity options carefully.
You can buy an annuity anytime from 55 (57 from 2028). Your annuity income will be taxed, but you can usually take up to 25% of your pension pot tax free first. Tax rules can change and their benefits depend on your circumstances.
Securing a higher annuity income
Your current pension provider is unlikely to offer you the best annuity rate, so it’s vital you shop around and compare quotes. Our annuity service can get you quotes from annuity providers on the open market. Just make sure you won’t lose any valuable guarantees or benefits. View our best annuity rates.
This isn’t the only way to increase your income. If you provide your health and lifestyle details when you apply, you could qualify for an enhanced annuity.
You don’t have to be ill to qualify. In fact, last year more than half of our annuity clients qualified for a higher income.
How to get quotes
Answer a few questions about you and your pension to find out how much income you could get from an annuity.
Annuity rates change regularly and may go up or down in the future. Your quotes will be guaranteed for a limited time only.
Combining security and flexibility
Throughout your retirement it’s likely that your income needs will change and you might need to use more than one option. In the early years you might be after flexibility and in the later years you could be after more security. It’s important you choose the right time to buy an annuity.
If you’re happy to keep your pension invested, you might not benefit from buying an annuity straight away, particularly if you plan to semi-retire. Drawdown is flexible and can help complement a gradual retirement. However unlike an annuity, income from drawdown isn’t guaranteed, and you could run out of money.
You could look to buy an annuity when you give up work altogether. At that point you’re unlikely to have a steady income stream to pay for your essential bills and an annuity can help cover these. Even if you’re in drawdown, you can still use some of your pot to buy an annuity.
With every year you get older it’s likely you’ll get a higher annuity rate too, so you could get more income if you wait. You could consider buying a series of small annuities every few years. As you get older you might also develop health conditions which could boost your annuity income.
Annual annuity income from a £100,000 pension
We generated these quotes using our online annuity quote tool on 7 November 2019. All quotes are for a single life annuity, paid monthly in advance, with no escalation or guarantees built in. Quotes are for a single individual who lives in an area which has an average life expectancy. Health and lifestyle details have been added to all of these quotes. We've said they drink 14 units of alcohol a week and take tablets for high blood pressure and high cholesterol.
Why use HL's annuity service?
- Get live quotes within minutes. Use our online annuity service to enter your basic details and get quotes, or enter your health and lifestyle details to see if you could qualify for a higher income.
- Our dedicated retirement experts. They can answer any questions you have or get you quotes over the phone. If you think you need advice, they can put you in touch with an adviser.
- The best rates from the UK’s leading annuity providers. Shopping around and comparing rates is vital if you want to secure a better deal.
- We won the Gold Standard Award for retirement for five years running (2014-2018). Whether you want to buy an annuity or just compare your retirement options, our award-winning service can help.
Now retired I spend a lot of my time in Greece enjoying the climate, culture and food. I decided to purchase an annuity because I wanted the security it offered. By confirming details about my height, weight and alcohol intake Hargreaves Lansdown were able to get me an enhanced annuity quote offering nearly £900 more income than that offered by some of the other providers.
Mr MCLEVER, Devon
Hargreaves Lansdown were brilliant in setting up my annuity. They did all the legwork for me by shopping around and finding me the highest income available from my pension. Everything was finalised within three weeks of first enquiring. I particularly liked that whenever I rang I spoke to someone straight away who was able to help.
MR REEVES, Wiltshire
I read about HL in the paper and I used the online tool to get some annuity quotes. The figures were thousands of pounds better than my pension provider's even though they were from the same insurance companies! Whenever I phoned the HL helpdesk I found it to be helpful and they always called back when they said they would.
MR FRANKLIN, Middlesex
I just wanted to say thank you for the enhanced RPI protected annuity quote received today. Thanks to you making it so easy I am going to receive an annual sum £2,500 greater than the lowest standard quote, and this is entirely down to your team. I remain hugely impressed with the service you provide.
MR COE, Stockton-on-Tees
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Guide to annuities
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