Making **the right choice** - things to be **aware** of

There are many considerations when determining whether an annuity (a guaranteed income for life) is right for you. This information can also be found in the Pre-retirement Report.


  • A lifetime annuity is set up on a fixed contract basis; you will know in advance the income payments you will receive and their frequency. Buying a lifetime annuity is a one-off purchase and once completed your income will not reduce if annuity rates go down.
  • You will also not benefit if annuity rates were to increase in the future. You can’t change the shape of your annuity, and you can't cash the annuity in once it has been set up.

Tax-free lump sum

  • You get a tax-free lump sum of money to spend or invest as you wish. Taking this reduces the amount of taxable income that you get each year, so you may pay less income tax (if applicable).
  • This one-off payment reduces the funds available to purchase an annuity. The amount of cash you hold in savings may impact your entitlement to some state benefits.

Protecting aganst inflation

  • If you select an escalating annuity, the effects of inflation are offset up to a known percentage each year.
  • If the annuity is in payment for a lengthy period, the total income payments may exceed those of a non-escalating annuity (level annuity).
  • Your initial income will be lower than that of a level annuity, and it may take many years before the total amount accumulated from an escalating annuity exceeds that from a non-escalating annuity .

Guarantee period

  • If you select a guarantee period, you can have peace of mind that in the event of your death, your annuity income will be protected for a selected period after you set it up.
  • The guarantee only applies for a fixed limited period. Your annuity income will be lower if you choose to add a guarantee period.

Providing for dependants

  • If you provide a spouse’s pension, they will be provided for after your death, receiving a percentage of your annuity income for the rest of their lifetime.
  • Your annuity income will be lower than that of a single life annuity (no spouse/dependant provision) as the potential payment term also depends on the life expectancy of your spouse.

Contact us

If you wish to use our service and find out more about how we can help you, please contact us on 0345 863 0495 or email