Lifetime annuities

A pension annuity is a regular income paid for life. You buy it using the savings you have built up before retirement, usually after taking a tax-free cash lump sum.

You would normally buy a pension annuity from an insurance company. The annuity rates (the rate at which your pension savings are converted into an income) vary from company to company and depend on when you buy. The higher the annuity rate, the more income you will get.

The amount of income you can get will depend on:

· the value of your pension savings;

· the amount of tax-free cash you wish to take;

· your age;

· your post code;

· your lifestyle and health;;

· the features you choose; and

· the annuity rates offered by insurance companies.

Once you buy a lifetime annuity, you cannot change anything and you cannot surrender or cash it in. A lifetime annuity guarantees the amount of income that you and your dependants will receive. This is why it is so important to make the best possible decision.