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You asked: What is a guaranteed annuity rate?

A guaranteed annuity rate is a fixed rate at which you can convert your pension fund into an annuity. The rate is written into the terms and conditions of your pension policy at the start and guarantees a minimum rate. You can use the open market option to compare what your guaranteed annuity rate would provide against the rates available in the market when you come to buy an annuity. These guaranteed rates are often significantly higher than the rates available on the open market. This makes them a valuable part of your plan and worth considering if the annuity available suits your personal circumstances. The guaranteed annuity rate is usually only available if you retire on your selected retirement date. So, if you choose to retire earlier or later than that date, you wouldn't receive the guaranteed rate. The guaranteed annuity rate normally only provides income for a single life, which means that you won't be able to provide an income for your spouse, civil partner or dependant. It also usually gives you a level income for the rest of your life, without the option to increase it in later years. Before you buy an annuity, we recommend that you speak to a financial adviser. If you don't have an adviser, find one in your area at www.unbiased.co.uk.

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