What is a pension annuity?
Everyone has their own vision of retirement, with individual goals and dreams. An annuity can act as solid platform for your retirement, giving you a guaranteed income for the rest of your life.
With an annuity, it’s a bit like still having a salary – you’re 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 your retirement knowing that you have that platform – without worrying that your income could run out.
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.
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 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.
Depending on how long your retirement is, 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.
Try our 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
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.
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 — so check out our guide for more information.
Make the right choice for you
When choosing what path to take for your future, it can be useful to get some help reading the map. Our pension guidance could be just the thing to set you on course for your retirement goals. Or you could call in the experts and speak to an adviser from the Aviva Financial Advice Team. They can guide you on all your financial planning options. Any recommendations they make will be for products from Aviva and other carefully selected partners.
Pension annuity articles
Take a look at our helpful articles and guides.
Get in touch
Reach out to us and have a chat with one of our annuity experts. They’ll answer all your questions and queries and help you find out how much your annuity income could be.
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Aviva Life & Pensions UK Limited. Registered in England 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.