Flexi-access drawdown
Your pension stays invested, offering growth potential. Requires ongoing monitoring or financial advice.
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What is a lifetime pension annuity?
A lifetime pension annuity is a financial product that converts your pension savings into a steady income for the rest of your life. By purchasing a lifetime annuity, you ensure a predictable and secure income, helping you manage your finances in retirement.
How does it work?
When you purchase a lifetime pension annuity you receive regular payments - monthly, quarterly, 6-monthly, or annually - either in advance or arrears. You can choose between a fixed income annuity or one that increases over time, depending on your needs. Additionally, you have options to provide for your loved ones after you die.
What are the advantages and disadvantages of lifetime annuities?
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Advantages
A guaranteed income for life
Flexible payment options
Higher income if you have certain medical conditions
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Disadvantages
Irreversible decision
Typically less flexible than other retirement options
Is a lifetime pension annuity right for you?
If you're seeking a reliable income stream in retirement and wish to avoid the uncertainties of market fluctuations, a pension annuity could be suitable. It's particularly beneficial for those who prefer financial stability and want to ensure their expenses are covered throughout their retirement years.
What other options are available?
A pension annuity may not be suitable for you. Other options to consider are:
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Lump sum withdrawals
25% of each lump sum is tax-free, the rest is taxed as income but there is a risk of depleting funds early.
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Delay access
Pension continues to grow tax-free but there's a risk of market downturns reducing the pot.
Reviewed on 2 Mar 2026 by
