Guaranteed Pension Annuity

Our Guaranteed Pension Annuity will pay you a secure regular income for life. When you purchase your annuity you'll be able to choose from three income options. We recommend you speak to a financial adviser and, if you're aged 50 or over, you can also visit Pension Wise for free and impartial guidance.

Benefits
  • Use your pension pot to provide you with a secure regular income for the rest of your life.
  • Choose from three income options.
  • You may be able to increase your annuity income.
  • You have options to provide an income for your spouse/civil partner or dependants when you die.
Risks and considerations
  • If you are a member of an 'occupational pension scheme', the options available to you may vary.
  • You are unable to change your mind once you’ve taken out your annuity.
  • If you have a guarantee on your pension plan this may be lost depending on which type of annuity you choose and may result in you receiving a lower income.
  • You don't have to take your income with Prudential. You should shop around and, depending on the type of annuity and options you choose, you may be able to get a higher income elsewhere.
  • If you and/or your partner have any certain health and/or lifestyle conditions, you will get a higher income elsewhere.

You have three income options to choose from. You may also be able to increase your income if you have any health and/or lifestyle conditions.

Minimum investment requirements

The minimum amount you need in your pension fund after taking any tax-free cash is £10,000 (you can take up to 25% of your pot tax-free).

Income options

You can opt to be paid monthly, quarterly, half-yearly or yearly in advance or in arrears with each option. 

  • Level income option
    • Your income stays the same for the rest of your life. 
    • Offers the highest starting income compared to the other two options, at a known and guaranteed amount. This will allow you to budget your spending against your income. 
    • You won't get any increases to protect your income against the effects of inflation, which will reduce your spending power in the future.
  • Fixed-rate escalating income option
    • Provides a known and secure level of income with a fixed yearly percentage increase, which you can select from 0.01% to 8.5%. This may help protect your income against the effects of inflation. 
    • The higher the yearly rate of increase selected, the more your initial income will be reduced. 
    • Your income will increase over time but this may be less than inflation and so reduce what you can buy in the future.
  • Retail Price Index (RPI) linked income option
    • Designed to protect your income from the effects of inflation. Your income will increase or decrease by the change in the Retail Price Index (RPI)  over the 12 month period, ending three months before your annuity anniversary date. 
    • Your starting income will be lower than with our Level Pension Annuity. 
    • Your income will change and can go down depending on the fluctuation of the RPI. If inflation falls below zero, your income will go down, unless you choose a negative inflation guarantee.

Additional options

Health and/or lifestyle conditions
You could get a higher annuity income if you and/or your loved one (if you select the 'Joint-Life' option when you take out your plan) suffer from certain health and/or lifestyle conditions - now or in the past.

It's important you discuss this with your provider if you think this applies to you, before you take out an annuity. Other companies may cover different conditions which means you could get more income elsewhere. 

Provide an income for others
If you choose a 'Single-Life' option, then when you die your income payments will stop and any loved ones will not receive an income after your death.

But if you would like to provide an income for someone after you die then there are two ways you can do this or you could even choose both. These are a Joint-Life option and a Payment Guarantee Period. You need to consider the options at the start as they cannot be added or amended at a later date.

Joint-Life option

  • We'll normally pay your spouse, civil partner or dependant an income for the rest of their life if you die before them. 
  • You decide whether we pay them the same level of income as you or less. 
  • If you ask us at outset, we will also stop your spouse or civil partner’s income if they remarry or enter a new civil partnership. 

Considerations

  • We won't pay a Joint-Life income if your spouse, civil partner or dependant dies before you or if your named dependant is no longer dependent on you at the time of your death. 
  • The higher the income you choose, the lower your own starting income will be

Payment Guarantee Period

  • You can choose a Payment Guarantee Period to guarantee that an income will be paid for a set period of time, from the start of your annuity even if you die within that period. This can normally be for up to 10 years. 
  • The income will usually be paid to your spouse, civil partner, estate or someone named in your Will. 

Considerations

  • If you live longer than the guarantee period, no income will be payable under this option when you die. The longer the Payment Guarantee Period you choose, the lower your starting income will be.

Please read our key features document to be aware of the full risks and benefits of this product.

Our other retirement options

We offer other ways to take your pension savings, which you can find out more about below. You could also speak to a financial adviser about your options. 

  • Cash options - You could take your pension pot in one go as a cash lump sum or as a series of smaller cash payments via our new 'Pension Choices Plan'.

  • Pension Choices Plan - On transferring your pension across to this Plan, you'll have the option of taking your pension as a series of cash lump sums or as income via flexi-access drawdown. You can also choose how your remaining fund is invested from a select number of funds. This plan is available without advice.

  • Flexi-Access Drawdown option - If you just want to take your pension as a drawdown, we offer the Flexible Retirement Plan (FRP). On moving your pension into this Plan, you'll have the option to draw down your pension as income, but via a financial adviser as it offers a wider range of funds for investing the remainder.

You can also leave your pension fund where it is and you may be able to combine these options. Find out more within our general guide to your options.

How to contact us

Advice from The Man from the Pru

Meet with a Prudential financial adviser in your area. We can review your retirement plans, advise on where to save your money and help make your finances more tax efficient. We can recommend options for you from a range of carefully selected products from Prudential and other providers.

Meet with The Man from the Pru

Talk about your options

If you're new to Prudential and looking to set up your product without needing to speak to a financial adviser, you can call our team on the number below.

0800 151 3930

 8am - 6pm, Monday to Friday

Already a Prudential customer? Call us on 0800 151 3932

0800 and 0808 calls are free from BT landlines and can vary from other providers.

A pension scheme provided (sponsored) by an employer for its employees. Company pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).

A pension scheme provided (sponsored) by an employer for its employees. Company pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).

The rate of increase in the price of commodity products over time as recorded in an index such as the Retail Prices Index (RPI). This can affect the buying power of investments when cashed in at a future date.

An annuity that pays you a regular income for life and then when you die usually pays your dependant a regular income for life too.

A pension scheme provided (sponsored) by an employer for its employees. Occupational pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).

The official “cost of living” Index in the UK based on a monthly survey of the prices of a basket of goods and services. The RPI is used to measure inflation.

An annuity that pays you alone a regular income for life.

A document drawn up to administer an estate on death.

This is the minimum number of years from the start of your annuity in which income will continue to be paid, even if you die during that period. The maximum guarantee period you can select is 10 years and it must be included at the start.

Important information

We are not recommending one product over another. We recommend you seek financial advice if you’re unsure about what product could be right for you.

The information above is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. For more information please visit www.hmrc.co.uk.

Pension Wise

We recommend that you use Pension Wise, a government service offering free and impartial guidance to those aged 50 or over.  Find out how to access this by visiting www.pensionwise.gov.uk or call  0300 330 1001 to book an appointment.  This service is available on the internet, over the telephone or face to face at a Citizens Advice branch.

You may also like to contact a financial adviser.