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
Rates are illustrative only. Use MoneyHelper comparison service for real annuity quotes.