Guaranteed Pension Annuity

The Guaranteed Pension Annuity (our conventional annuity) guarantees to pay you a regular income for life. When you purchase your annuity you'll have the flexibility to choose whether your income stays the same throughout retirement, goes up each year by a fixed amount, or matches yearly changes in inflation by being linked to the Retail Prices Index (RPI).

Income options

For each of the following income options, the minimum investment is £10,000 after any tax-free cash has been taken.

Option one - Your income stays the same for the rest of your life.
This option could give you a higher initial income but you won't get any increases to protect your income against inflation, which could reduce your spending power in the future.

Option two - Your income rises each year by a fixed amount.
You can select a yearly increase of up to 8.5%. The higher the rate of increase the more your initial income will be reduced.

Option three - Your income changes each year in line with inflation.
This option links your income to changes in the RPI, a measure of inflation in the UK. You will start with a lower income than if you choose an income which does not increase. Also, if the RPI is negative, your income will decrease in line with the index unless you opt for a negative inflation guarantee.

Benefits of our Guaranteed Pension Annuity

• Option one - Offers the highest starting income, at a known and secure level - allowing you to budget your spending against your income.
• Option two - Provides a known and secure level of income with fixed yearly increases. This may protect your income against the effects of inflation.
• Option three - Aims to protect your income from the effects of inflation.

If you have an illness, condition or lifestyle habit that may shorten your life expectancy, you may be able to purchase a Guaranteed Pension Annuity on enhanced terms.

Considerations

• Option one - Inflation can reduce the spending power of your income in the future, especially if you choose a level income.
• Option two - The higher the yearly increases in income you select, the lower the starting income.
• Option three - If you link your income to changes in the RPI and the rate of inflation falls below zero, your income will go down. You can select an option to protect yourself against this, but this will reduce your starting income.

Want to know more?

If our Guaranteed Pension Annuity sounds right for you, or you'd like more information, call our annuity consultants on Lines are open 9am to 6pm Monday to Friday.

If you'd like to read about our Guaranteed Pension Annuity in more detail online, please refer to our key features literature.

For general guidance on converting your pension into an annuity, please see our guide to choosing an annuity where you'll also find answers to our most frequently asked questions.