What is a Pension Annuity?
A lifetime annuity pays a guaranteed income for your life from the funds you have built up in your pension plan.
Your annuity provider will pay you a regular income, taxed in the same way as earnings. The amount of income payable is dependent on your age and health, the size of your pension fund, economic factors, the type of annuity and the options you select.
You should also be aware that once you have purchased an annuity you cannot cash it in or make changes to your selected options.
Annuity options include:
You must be aged 55 or over or, if younger, meet ill-health conditions. The annuity must be purchased using funds from your uncrystallised rights held in a money purchase pension or from drawdown funds.
Some annuity providers offer annuities which pay you a higher than normal income if you have a medical condition(s) which can affect your normal life expectancy. These are called impaired life annuities.
An enhanced annuity may be available if you smoke regularly, are overweight, if you have followed a particular type of occupation or live in certain parts of the country.
Find out more in our Pension Annuity Guide's
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