How do annuity rates work?

You've worked hard for your retirement and to make the most of your pension you'll want to find the best annuity rate available to you. Your annuity fund will provide you with a source of income for the rest of your life, so choosing the right provider is an important decision.

Annuity rates are set by each provider and can vary considerably; rates tend to fluctuate quite regularly, like the interest rates on a savings account. Once you've bought an annuity you usually can't change it and are locked into that rate; therefore it's important for you to understand how annuity rates work and what impacts the income you will receive in your retirement.

Your own personal circumstances are taken into account when working out how much income you will receive: These factors include; your age, your health and the options you choose to add to your annuity.

Pension Annuity (including Enhanced)

Many people don't realise that it's vital to tell us if they have had, or are currently suffering from, any medical conditions. This is because they could gain a better annuity rate, sometimes referred to as an Enhanced Annuity. People with certain lifestyle conditions, such as smokers, or those who are overweight, may also qualify for a better rate.

The reason why you may get a better annuity rate is that a person with ill health/certain lifestyle conditions is expected on average to take fewer annuity payments than a person of the same age that has a clean bill of health.

Your spouse or civil partner's health can also be taken into account if you want your annuity to include them.

Check out our list of conditions normally covered (PDF 70KB).

Pension Annuity Calculator

Using factual information provided by you, this easy-to-use calculator produces figures based on Aviva’s pension annuity product and some of the options it can offer. For information about all our annuity’s options, you should see our Pension Annuity​.

Please be aware that the calculator isn’t intended to provide personalised advice or give personal recommendations

Calculate your retirement income

Next steps

Pension Wise

Pension Wise is a free and impartial service set up by the government for people retiring with defined contribution pensions. It will help you understand what your choices are and how they work.

You'll be able to get help on the Pension Wise website, over the phone or face to face about:

  • what you can do with your pension pot
  • the different pension types and how they work
  • tax you pay on your pension.

If you're not sure about your options at retirement you should seek appropriate guidance or advice.

Speak to a financial adviser

Nothing on this site is personalised advice or a recommendation. If you need a personalised recommendation based on your personal circumstances, you should seek financial advice. We can't give you advice but we can put you in touch with an adviser who can talk to you about which financial products or investments may be right for you.

Call a member of our team on

0800 533 5195

Monday to Friday - 9.00am - 5.00pm

For our joint protection, we may record our telephone calls. Calls are free from a BT land line. Costs may vary from mobiles and other networks.

Alternatively, you can visit www.unbiased.co.uk to find an adviser in your local area

Call us now for more information

If you’re new to Aviva

0800 068 3038

Or if you are already a pension customer

0800 533 5195

Monday to Friday - 9.00am - 5.00pm

For our joint protection telephone calls may be recorded and/or monitored.

Our team will be happy to provide you with a personalised quote once you know which options you want.

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