The decision to purchase an annuity is usually final so you must be sure that it's the right option for you before you commit. The amount of income you'll receive will be based on your pension savings, individual circumstances and the type of annuity product you choose. If your current pension provider offers an annuity with a guaranteed rate, you may lose this option and other benefits by changing provider. Before purchasing an annuity its worth checking what alternatives are available and making sure you understand the risks involved. Read this guide for more.

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You can get a free, personalised annuity quote using our annuity calculator to compare the best annuity rates.
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Aviva Pension Annuity
Maximum Age
90 years
AKG Rating
Purchase Price
Legal & General Pension Annuity
Maximum Age
AKG Rating
Purchase Price
LV= Pension Annuity
Maximum Age
AKG Rating
Purchase Price
LV= Protected Retirement Plan
Maximum Age
AKG Rating
Purchase Price

This is a non-advised comparison of annuities; we endeavour to make it as near to whole of market as possible but it may not include all annuity options available. We work with a broker who can provide individual annuity quotes for both single and multiple pension pots, and indicate which products are available via the broker within our comparison. Certain types of annuity may require a medical assessment and you may not be able to seek compensation from FSCS or assistance from the Financial Ombudsman Service in some circumstances.

We provide an independent comparison service free of charge but we may receive a commission from some of the companies we refer you to. These are indicated with purple buttons.

How to get the Best Annuity Rates

If you've scrimped and saved to build up a retirement fund you'll want to make sure you reap the benefits when you finish work by finding the best pension annuity possible.

Here's how you can find the best annuities on the market and make your money go further in retirement.

What is an annuity?

An annuity is a financial product that pays you retirement income for life; it's usually bought by cashing in your personal pension fund.

Essentially pension annuities translate the money you've saved while you've been working into a guaranteed income to support you throughout retirement.

Why bad habits + poor health = bigger income

It may seem unusual but telling prospective annuity providers about pre-existing medical conditions and poor lifestyle choices will actually work in your favour when looking for annuity quotes.

This is because pension annuity rates are based in part upon how long the provider estimates you'll live for in retirement because they use this to gauge how long they will have to pay you an income.

A pre-existing medical condition - whether high blood pressure or being overweight - could mean your life expectancy is predicted to be lower so you'll likely be paid more as a result.

What's more, your personal habits, like whether you smoke or drink, can also affect the pension annuity rates you're offered.

Strangely, the poorer your health and the less healthy your lifestyle, the higher the annuity rates you're likely to be offered so the higher your retirement income.

For this reason it really pays to be open and honest if you want to get the best pension annuity rates.

Who gets your money?

One of the big decisions you need to make when looking for an annuity is what exactly you want to happen to your money.

While this sounds like an obvious question given you'll most likely be buying an annuity for retirement income, basic pension annuities stop paying out when you die.

if you're married or have young children who are reliant on your income you need to think about how they'll manage should you pass away.

Most annuities offer an option to continue repayments to a partner or a dependent after you pass. 

While this is an option that you may want to consider, the downside is that while you're alive your monthly income will take a hit so you'll get much less.

An alternative worth considering is to opt for guarantee repayments for a set time period - usually 5-10 years.

Do this and even if you were to die during this time payments would continue to your nominated recipient until the end of the guarantee. Of course, if you lived for longer you could find yourself without any annuity income to rely on.

If you are concerned about balancing income that you need with how your family would manage if you passed away, one option would be to take an annuity that only pays out whilst you're alive, but get a decent life insurance policy that will pay out to cover your family's costs as and when you die.

Cash lump sum?

When you transfer your pension fund into an annuity income you have the option to take up to 25% of the total as a tax free cash lump sum.

Before you begin comparing annuity quotes you will need to decide whether to withdraw some or all of this cash free lump sum, or leave the money in your pension fund, so you know the size of your pension fund exactly.

The size of the pension fund you swap for an annuity will determine how much you're paid throughout retirement.

Read our guide Should you take a 25% tax free lump sum out of your pension fund? for help deciding.

Since 2014, the rules on taking out a lump sum changed to make them more flexible, and from April 2015 you can now withdraw all of your pension pot, and use it how ever you like. Read our Guide, New Pension & Annuity Rules: What They Mean for You to find out more.

Why you MUST compare UK annuity rates

Once you've decided whether you're going to cash in all or just part of your pension fund to buy a pension annuity you can start to compare annuities in search of the best deal.

When you decide to retire, most pension fund providers will make you an annuity offer automatically.

You should never accept this opening offer; in almost all cases a better annuity deal will be available on the open market.

The easiest way to maximise your income is using an online annuity comparison, then speak to a broker.

This way you can check which annuity provider offers the features you're looking for and easily check their current annuity rates for your personal circumstances.

Buying an annuity is one of the most important financial decisions you'll make so it's vital you do your research, get qualified professional help if you need it and make your pension pot stretch as far as you possibly can

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