What is a Pension Annuity?

Our Pension Annuity is a lifetime annuity which pays your client a regular income, guaranteed for the rest of their life.

Your client can tailor the income to meet their needs, so they'll know exactly what they'll be receiving and when. Options could include; 

  • Your client may receive a higher income, also known as an enhanced income, if they have certain health or lifestyle conditions, such as smoking or being overweight.
  • An option to have income which increases annually to protect against inflation.
  • A range of death benefits to provide income for dependants in the event of your client's death.
  • Clients can choose payment frequency to be monthly, quarterly, half yearly or yearly; in advance or in arrears.


A Pension Annuity may be suitable for clients who:

  • Are aged 55 and over.
  • Want a guaranteed income for life.
  • Don't want their pension to be subject to any investment risk.
  • Want to buy annuities in stages to make up a reduced wage or salary.
  • Want to manage their income to maximise tax efficiencies.
  • Have a pension pot of at least £5,000, after any tax-free cash and an adviser charge, if applicable.

A Pension Annuity can: 

  • Provide an income for your client as well as what they receive from a State Pension.
  • Help your client who is concerned about inflation and would prefer an income which increases annually.
  • Reduce the investment risk of some or all of your client's pension pots.
  • Be used as part of a phased retirement, partially buying annuities to reduce investment risk on pension pots gradually.
  • Provide death benefits such as spouse's pension or a guaranteed minimum payment period.
  • Provide value protection. Your client can choose if they want to protect all or part of the original amount that they used to buy the annuity.

What are the risks?

There are risks to your client too. They include:

  • Your client could lose money - pension annuities don’t have a ‘cash-in’ value and the total income paid from your client’s annuity could be less than the amount they used to buy it. A guaranteed minimum payment period and/or dependant's pension can be added to reduce this risk.
  • Timing - the amount of pension income we’ll offer your client will be based on our annuity rates at the time. If they buy when rates are low, their income will reflect this.
  • Inflation - price inflation can reduce the real value of your client’s income over time, which could mean that it doesn’t stretch as far in future years, an increasing income can reduce this risk.
  • It's a once and for all decision. Once their annuity is in payment your client can't change any of their payment options, even if their circumstances change.
  • Deteriorating health. The pension income we offer your client will be based on the information they provide when they apply. If their health subsequently deteriorates, we won’t be able to increase their income.

Our Pension Annuity has been developed with options and death benefits that can be tailored to your clients' needs to help you build unique retirement income solutions.

Please note, terms and conditions apply to each option. For further information please see the Pension Annuity Terms and Conditions PDFsize: 1.8MB

Each option has a cost which is considered when we calculate the starting income. There are no further costs or charges once the annuity is in payment.

The options available to your clients are:


  • If your client has a qualifying medical or lifestyle condition, our fully underwritten annuity means that they could receive an enhanced level of income throughout their retirement.

Income options 

  • Fixed income - the same amount each year for the rest of your client's life.
  • Increasing income - income will increase by a fixed percentage each year up to 10%, chosen at outset.
  • Inflation proof - income will increase in line with the Retail Prices Index (RPI) each year or 5% with RPI capped, referred to as Limited Price Indexation.


Monthly, quarterly, every six months or every year, either:

  • In advance - at the start of the payment period; or
  • In arrears - at the end of the payment period.

Final (partial) income instalment

  • Widely referred to as 'with proportion', this option is available for 'in arrears' payments and provides a final amount for the period between the last income payment and the day your client actually dies. 

Dependant's pension

  • Your client's spouse, registered civil partner or financially dependent partner continue to receive some of the pension income (up to 100%), if your client dies.

Guaranteed minimum payment period

  • If your client selects this option and dies during the chosen period, their annuity will continue to be paid to their estate for the rest of the guaranteed minimum payment period. 
  • Terms of up to 30 years from the date the annuity starts can be chosen, with a maximum age at the end of the period of 100. This means that if your client is above age 70, the longest period will need to be lower than 30 years.


  • If a guaranteed minimum payment period and dependant's pension are selected your client can choose when the dependant's pension starts. This can be when your client dies (known as 'with overlap') or when the guaranteed minimum payment period ends (known as 'without overlap').

Value protection

  • This option allows your client to protect all or part of the amount used to buy their pension annuity. Clients can select this option alongside a dependant’s pension but it cannot be used together with a guaranteed minimum payment period.

Our Enhanced Pension Annuity can offer clients extra income where they've one or more medical condition or lifestyle health risk.

Your client's income will be based directly on their health at the time they buy their annuity. It's important that you give us full and accurate information about any medical conditions and/or lifestyle health risks. Terms and conditions apply to enhanced annuity rates.

Accurate underwriting is essential to providing your clients with the maximum income we can offer.

Read our guide for more information PDFsize: 1721 KB

The following are not exhaustive lists and we may be able to consider other conditions. Please contact us if your client has a condition not listed here.

Potentially qualifying medical conditions

  • Alcohol consumption
  • Alzheimers
  • Amyotrophic lateral sclerosis (ALS)
  • Brain tumour
  • Cancer (all types)
  • Cerebrovascular accident (CVA)
  • Cerebrovascular - brain haemorrhage
  • Cerebrovascular - lacunar infarct
  • Cerebrovascular - stroke
  • Cerebrovascular - subarachnoid haemorrhage (SAH)
  • Cerebrovascular - transient ischaemic attack (TIA)
  • Crohns Disease
  • Dementia (all types)
  • Diabetes, type 1
  • Diabetes, type 2
  • Epilepsy
  • Haemochromatosis
  • Heart - angina
  • Heart - aortic aneurysm or abdominal aortic aneurysm
  • Heart - arrhythmia
  • Heart - atrial fibrillation
  • Heart attack
  • Heart block
  • Heart - brachycardia
  • Heart - cardiomyopathy (All types, including HOCM)
  • Heart - enlarged heart
  • Heart failure
  • Heart inflammation
  • Heart - supraventricular tachycardia (SVT)
  • Heart - tachycardia
  • Heart valve disorder (mitral, aortic, bi-cuspid, congenital, from birth)
  • Heart valve replacement
  • Heart - ventricular ectopics
  • High blood pressure
  • High cholesterol
  • Huntington's disease / chorea
  • Idiopathic thrombocytopenic purpura
  • Kidney - (end stage) renal failure (ESRF)
  • Kidney - chronic kidney disease (CKD)
  • Kidney - glomerulonephritis
  • Kidney - polycystic kidney disease (PKD)
  • Kidney - transplant
  • Liver - amyloidosis
  • Liver - cirrhosis
  • Liver - hepatitis (unless hepatitis A and fully recovered)
  • Liver - primary sclerosing cholangitis
  • Liver - transplant
  • Major organ transplants
  • Motor neurone disease
  • Multiple sclerosis (MS) all types
  • Muscular / myotonic dystrophy
  • Myasthenia Gravis
  • Obesity
  • Parkinson's disease
  • Peripheral vascular disease (PVD) or intermittent claudication
  • Polycythaemia
  • Respiratory - asbestosis
  • Respiratory - asthma
  • Respiratory - bronchiectasis
  • Respiratory - chronic bronchitis
  • Respiratory - chronic obstructive pulmonary disease (COPD)
  • Respiratory - emphysema
  • Respiratory - pleural plaques
  • Respiratory - pulmonary fibrosis
  • Rheumatoid arthritis
  • Sarcoidosis
  • Smoking  (Current or Previous)
  • Spinal cord injury / paralysis
  • Systemic lupus erythematosus (SLE)
  • Thrombocythaemia
  • Ulcerative Colitis
Contact centre

Intermediary Annuity Support Team

Speak to our team for help with your annuity quotes. Call our team on

0345 071 0040 for quotes

0345 070 2459 for application updates

Monday to Friday 9am – 4pm*

Or email them**

*Call charges will vary. We may record and monitor calls. 

**If you're contacting us by email please remember not to send any personal, financial or banking information belonging to you or your client because email is not a secure method of communication.

Compare our annuity products

Our annuity products may appear similar, but it's important to understand the differences between each product. We've pulled out some of the key points below.

  Pension Annuity Fixed Term Retirement Plan Cash-Out Retirement Plan Lifetime Care Plan
Age 55+ 55+ 55+ 60+
Minimum investment £5,000 £10,000 £10,000 £10,000
Maximum investment £1,000,000. If over that amount, it will be passed to our underwriting team Unlimited - but additional checks to be carried out on large amounts Unlimited - but additional checks to be carried out on large amounts Unlimited - but additional checks to be carried out on large amounts
Source of funds Pension savings Pension savings Pension savings Customer's own money
Term Life 3 to 40 years 3 to 40 years Life
Guaranteed Minimum Payment Period 1 to 30 years 0 to 40 years 0 to 40 years
Value Protection
Spouse/Dependant benefit
Maturity value
Option to choose an increasing income in line with Retail Prices Index (RPI)1
    Fixed Term Annuities Lifetime Care Plan

1RPI is the index of the average change in the prices of goods and services in the UK. For our Pension Annuity and fixed term annuities, your client can choose to have the increase capped at 5%, referred to as the Limited Price Index (LPI). If they choose an income that increases over time, the income we’ll pay them to begin with will be lower than if they'd chosen a level income.



Key documents