What is a pension annuity?
A pension annuity is a bit like having a salary after you retire. It's a product that takes your pension pot and turns it into a guaranteed income for the rest of your life. You'll be paid regularly and you'll pay income tax on the money you receive.
There are no hidden charges or unwanted surprises as we allow for all fees when we calculate your income.
Because it's guaranteed, you can make plans for retirement, knowing you'll always have this income. No fear of the pot running dry.
Different annuity providers offer different rates and options. Shopping around can help you find the annuity best suited to your circumstances, or the one that will pay you the highest income.
The benefits of a pension annuity
If you’re 55 or over, you can use some – or all - of the money in your pension plan to buy an annuity. That’s going up to 57 and over from 6 April 2028, unless you have a protected pension age.
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Get paid your way
We can often fix your income for the rest of your life, increase your payments at a fixed rate each year, or increase your payments in line with the Retail Price Index. It’s your call.
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Take care of your people
Take care of a partner, a child under 23, or someone who’s dependent on you because of their disabilities – we can pay up to 100% of your guaranteed income to them if you pass away.
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Secure more than a life-long income
You can set your income to be paid for a minimum of between 1 and 30 years from the start of your annuity, even if you pass away. We offer value protection as standard for 90 days from your plan start date. If you die within this period, it pays a lump sum if there are no annuity payments continuing to a dependant.
The different options you select will have an impact on the income you receive. Once your annuity has been set up, you can't make any changes to it or cash it in.
Up to 25% of your pension tax-free
You can take up to 25% of your pension in tax-free cash before you buy your annuity. If you’re with another provider, you’ll need at least £10,000 left in your pension after withdrawing tax-free cash and paying any adviser fees. If your pension is with Aviva, there’s no minimum. Taking tax free cash will result in a lower level of income.
No surprise fees or charges
We allow for all fees when we calculate your income – so there are no hidden charges or unwanted surprises.
Remember
Depending on how long your retirement is, and the options you build into your annuity, you may receive less in payments than the amount you paid for the annuity.
Tax benefits are subject to change and depend on your individual circumstances.
Pension annuities explained
Watch our video to find out what an annuity is, and if it could be right for you in retirement.
Try our annuity calculator
Annuity Calculator 
Get an idea of what your guaranteed life-long annuity income could be by having a whirl on our annuity calculator. It’s a piece of cake to use and only takes a couple of minutes – less than the time it takes to eat an actual piece of cake.
How we calculate your annuity income
Lots of things go into working out your annuity income, like the size of your pension, the benefits you want from your annuity, your age, and your health. It’s important that you’re as upfront and clear about your medical history as possible, and providing us with detailed information like medical letters or hospital reports can lead to a larger annuity income.
You can take a deep dive into how we crunch the numbers by checking out our annuity rates explainer.
How to get started
Important documents
Before deciding whether to buy an annuity, make sure you’re up to speed with how it works and what options are available by reading our Key Features document and Shopping Around Guide.
Looking for financial advice?
If you have a pension or investments worth more than £300,000 at Aviva we can give you personalised advice to help you use you pension in a way that suits you.
Pension Wise
Pension Wise from Moneyhelper is a service backed by the government. It offers free, impartial guidance to over 50s. They can explain the options to take money from your defined contribution pension pots.
Pension annuity FAQs
What happens to an annuity when you die?
How is an annuity taxed?
What’s a benefit crystallisation event?
How does an annuity work?
Can I sell an annuity?
Learn about our pension annuity
We have a wide range of simple guides that can answer your questions and help you get to grips with our pension annuity.
Investment
How our annuities help power windfarms
Find out how your annuity premiums could be invested to help power wind farms, create social housing and more.
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Things to consider
Level vs escalating annuity
Level annuities pay a higher initial income, but escalating annuities can offer stability in the face of inflation.
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Getting started
Annuity glossary - explaining the jargon
The language of annuities can be confusing, so here's a simple guide to some of the key terms.
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Things to consider
How does annuity value protection work?
Annuity value protection allows you to add death benefits when you go to purchase your annuity.
Annuity calculator
Work out the annual pension income you could receive.
Pension calculator
See what your pension could be worth in retirement.
Inflation calculator
Learn how inflation could impact your investments.
Get in touch
Whether your pension is with Aviva or another provider, reach out to us and have a chat with one of our experts. They’ll answer all your questions and queries and help you find out how much your annuity income could be.
Aviva Life & Pensions UK Limited. Registered in England and Wales No. 3253947. Registered office: Aviva, Wellington Row, York, YO90 1WR. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number: 185896.