Compare Annuity Quotes

Compare Annuity Quotes

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An annuity is a financial product that converts a lump sum saving into a regular annual income. Most people choose to buy an annuity with their private pension savings on retirement, often after taking a tax-free lump sum (up to 25%) from their pension pot. Savings of £100,000 or more are usually required to purchase an annuity.

Annuities are popular because they provide a known and guaranteed annual income for the rest of your life. You know how much you’ll get each year and are able to budget and enjoy your retirement without worrying about a fluctuating income.

The amount you receive depends on the rate set by the annuity provider and the size of your pension pot (after the tax-free lump sum, if you’ve chosen to take it) at the time you buy your annuity. The annuity provider will quote a percentage rate, which you multiply by your pension savings to calculate your expected annual income. For example pension savings of £200,000 at a rate of 6% will provide £12,000 per year.