What is a Guaranteed Annuity?
When you retire, you need to make sure you have enough money to last the rest of your life. So, in return for some or all of your pension savings, a Guaranteed Annuity can pay you a secure, regular income for life, no matter how long you live.
A Guaranteed Annuity may be a sensible way of covering your fixed day-to-day living expenses in retirement, alongside your state pension and any other sources of income.
The downside is that, if you put all your money into a Guaranteed Annuity, you won’t have a 'nest egg' for unforeseen expenses (like paying for a new boiler or broken down car) or for treats (like holidays).
If you choose to purchase a Guaranteed Annuity within your Retirement Account, the income you receive will depend on a number of things including:
- The size of your pension fund used to buy the
- Your age and personal circumstances (for example where you live, your lifestyle or medical history)
You’ll also need to decide how you’d like to receive your income, for example whether you want it to stay the same (level) or rise in line with inflation. You’ll need to decide if you wish to make provision for loved ones in the event of your death.
This provision could be in the form of an ongoing income for the rest of their life or a lump sum or both. You can also choose how often income is paid – monthly, quarterly or yearly. Income will be paid in arrears – which means we’ll pay you at the end of your chosen period.