Lifetime annuity

Guaranteed income for life with no investment risk.

More info on lifetime annuities

Guaranteed, reliable income no matter how long you live, unaffected by dips in stock market performance or interest rates.

The only retirement income product that pays more if you have certain medical conditions or lifestyle factors.

No need to manage a fund or your income payments: it’s all set up and done for you.

Can be set up so that your income rises each year to help keep pace with inflation.

Option of including death benefits so beneficiaries receive an income or lump sum when you pass away.

No flexibility to cash in your annuity or make any changes once it’s set up, even if your personal circumstances change.

You won’t benefit from future investment growth or any improvements in annuity rates.

Inflation will reduce the real-term value of an annuity unless you opt for an increasing income option.

Unless you choose the option of death benefits, income will cease on your death.

Fixed-term annuity

Guaranteed income for a set term you choose, and/or a guaranteed lump sum return.

More info on fixed-term annuities

Guaranteed, reliable income for your chosen term, unaffected by future dips in stock market performance or interest rates.

You can allocate some or all of your money to grow rather than accessing income from it, locking-in a guaranteed return at the end of the annuity term.

With some providers, you can cash in early for a lump sum payment.

As with a lifetime annuity, no need to manage a fund or your income, options to set up inflation-linked income, and death benefits options.

Your income payments stop at the end of the term - no guaranteed income for life.

May provide less income over your life compared to a lifetime annuity.​

The income and term can’t usually be changed once the annuity is in place (although some providers allow an early cash-in).

The size of an early cash-in lump sum would depend on interest rates at that time, and you may therefore get back less than you put into the annuity.

Drawdown

Your savings are invested and you access them as and when you wish.

More info on drawdown

You’re in control – take as much or as little income as you need, whenever you need it, giving you flexibility if your circumstances change.

Your pension pot stays invested, so there’s a chance your returns could outpace inflation and help preserve your spending power over time.

You can usually pass on any remaining pension savings to your beneficiaries when you die, either as a lump sum or income.

There’s a risk your funds could run out if you take too much too soon, your investments underperform, or you live longer than expected.

Your income isn’t guaranteed – the amount you can withdraw may reduce or stop altogether depending on investment performance.

As the value of your investments can go down as well as up, you might end up with less than you originally invested.

Lump sum (UFPLS)

You keep your pension savings invested and take lump sums when you wish.

More info on UFPLS

Take money out when it suits you, giving you control and flexibility if your circumstances change.

The rest of your pension stays invested, offering the potential for growth that could help offset inflation.

You can usually pass on any remaining pension savings to your beneficiaries as a lump sum or income when you die.

Your pension could run out if you take too much too quickly, your investments don’t perform well, or you live longer than expected.

Your income isn’t guaranteed – it can go down or stop altogether depending on investment performance.

The value of your pension can fall as well as rise, so you might end up with less than you started with.