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In this section
Annuities
Most annuities provide you with a lifelong, regular income that is guaranteed to last as long as you live. A quarter (25%) of your pension pot can usually be taken tax-free, up to your remaining lump sum allowance, before you buy the annuity and any other payments will be taxed as earnings.
Important information - please keep in mind that the value of investments can go down as well as up so you may get back less than you invest. You cannot normally access your pension/SIPP until age 55 (57 from 2028). This information is not a personal recommendation for any particular product, service or course of action. Pension and retirement planning can be complex, so if you are unsure about the suitability of a pension investment, retirement service or any action you need to take, please contact Fidelity’s retirement service on 0800 368 6882 or refer to an authorised financial adviser of your choice.
Annuities at a glance
Advantages
- You get peace of mind because you’re guaranteed the income you have arranged
- You can make plans for the future knowing how much income you’ll have
- It’s possible to provide an income to your spouse or partner or leave any surplus to your loved ones
- Even if you live past 100, you could still have an income
- You can combine the guaranteed income from an annuity with other types of retirement income
Keep in mind
- Annuity rates can change over time and so how much you might get will depend on the rates available at the time you buy an annuity
- It can take many years for the payments from an annuity to add up to more than the money you had saved up in your pension pot
- Providing an income to your spouse or partner or leaving any surplus to your loved ones may mean your income will be lower
- Most annuities aren’t flexible. Once you’ve bought one, you have to stick with it – even if your situation changes
- Unless you choose an increasing annuity, the income you receive will remain the same each year. With the effects of inflation, it will buy less as the years go by
- Unless you choose an investment-linked annuity, you won’t benefit from economic or stock-market growth
Finding the right annuity
There are many different types of annuities that offer different benefits. So, it’s important to think about which type of annuity would be best for you.
- Do you want an income that will remain the same or increase each year?
- Do you want an income just for you or one that will pay to your spouse or dependants if you pass away first?
- Do you want to benefit from stock-market performance?
- Do you want to buy an annuity for a shorter fixed term and then review your options?
- Could you benefit from a higher (enhanced) annuity that takes into account any existing health issues you may have?
Shopping around
Fidelity don't provide guidance for annuities. If you have decided to buy an annuity, it's really important to shop around and get quotes from a number of providers for an annuity product that best suits your needs.
If you're unsure about the action you need to take, please speak to one of Fidelity’s advisers or an authorised financial adviser of your choice (who specialises in retirement advice). Alternatively, you can use MoneyHelper's Annuity comparison tool to search the market to help you see how much income you could get from a guaranteed income for life, or fixed term. It will show you how all the providers on the market compare.
When shopping around, it's important to watch out for pension scams. Remember, you only get to buy an annuity once and you can't change your mind, so it must be the right decision for you.
Ready to chat?
Talk to someone about your retirement options in more detail
We can help
Close to retirement but unsure about the options and pitfalls ahead? We can offer advice to help you find the best solution for your retirement. Call us on 0800 368 6882, Monday to Friday, 9am - 5pm.
Fidelity’s retirement servicePension Wise
We also recommend the Government's Pension Wise service which offers free impartial guidance to help you understand your options at retirement. You can access the guidance online at: moneyhelper.org.uk or call them on 0800 011 3797.
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Please remember that past performance is not necessarily a guide to future performance, the performance of investments is not guaranteed, and the value of your investments can go down as well as up, so you may get back less than you invest. When investments have particular tax features, these will depend on your personal circumstances and tax rules may change in the future. This website does not contain any personal recommendations for a particular course of action, service or product. You should regularly review your investment objectives and choices and, if you are unsure whether an investment is suitable for you, you should contact an authorised financial adviser. Before opening an account, please read the ‘Doing Business with Fidelity’ document which incorporates our client terms. Prior to investing into a fund, please read the relevant key information document which contains important information about the fund.
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