Annuity Calculator
Convert your pension pot into guaranteed lifetime income
Last updated: February 2026
Your Details
Total pension savings to convert
Minimum age 55 (rising to 57 in 2028)
Annuity Type
Features
Payments continue to beneficiaries
Protects against inflation
Health conditions
Higher rates available
Guaranteed Annual Income
£6,197
For life, starting at age 65
Per Month
£516
5-Year Guarantee Active
If you die within 5 years, your beneficiaries receive the remaining payments. Guaranteed total: £30,985
Tax-Free Cash Option
Take up to 25% of your pension pot tax-free, then buy annuity with the rest:
Tax-Free Lump Sum
£25,000
One-time payment
Reduced Annual Income
£4,648
£387/month
Income Projection Over Time
Important: Annuities are Irreversible
Once you buy an annuity, you cannot change your mind, access the capital, or switch providers. Make sure you shop around and compare rates from multiple providers before committing.
Rate Factors
Higher Rates ✓
- • Older age
- • Single life
- • Health conditions
- • Smoker
- • No guarantee period
- • Level income (no increases)
Lower Rates ✗
- • Younger age
- • Joint life
- • Good health
- • Non-smoker
- • Guarantee periods
- • Escalating income
Understanding Annuities
Definition
An annuity is an insurance product that converts your pension pot into a guaranteed income for life. You give an insurance company a lump sum, and they pay you a regular income until you die.
✅ Pros
- • Guaranteed income for life
- • No investment risk
- • Predictable budgeting
- • Peace of mind
- • Can't outlive your money
❌ Cons
- • Irreversible decision
- • No flexibility or access to capital
- • Low inflation protection (unless paid for)
- • Poor value if you die early
- • Rates historically low
💷 Lifetime Annuity
Most common type - pays for your entire life
- • Single life: Stops when you die
- • Joint life: Continues to partner
- • Can add guarantee periods
- • Can add inflation protection
📊 Enhanced Annuity
Higher rates for health conditions
- • Heart conditions
- • Diabetes
- • High blood pressure
- • Smoking history
- • Can increase income 20-40%
📈 Investment-Linked
Income varies with investment performance
- • Potential for growth
- • Income can go down
- • More risky
- • Not common in UK
⏰ Fixed-Term
Pays for a set period (5-25 years)
- • Not lifetime income
- • Remaining pot returned at end
- • Bridge to State Pension age
- • Rare - most choose drawdown instead
Rates are illustrative only. Use MoneyHelper comparison service for real annuity quotes.
Related calculators
Other free UK tools that follow on from this calculation.
Pension Drawdown Calculator
How long a pension pot lasts at a chosen annual withdrawal, with the 25% tax-free lump sum.
Pension Calculator
Project workplace auto-enrolment and SIPP contributions to estimate retirement income.
State Pension Calculator
Check your State Pension age and estimate weekly pay at the £241.30 full new rate.
Inheritance Tax Calculator
IHT at 40% (or 36% with 10% to charity) using both nil-rate bands and spouse transfers.