If you've been paying into a personal pension during your working life, you'll have been building up a pension fund. There are various ways you can access this money from age 55. One of the options is to buy a guaranteed income for life (also known as an annuity). This is designed to provide you with an income for the rest of your life, no matter how long you live.
You might have also paid into a pension scheme with an employer - if this is the case you'll need to find out how to access this by contacting them directly. Unless you have a final salary (defined benefit1) pension scheme where you should automatically receive money as an annuity.
You're guaranteed to keep receiving an income for as long as you live.
There are a number of different types of guaranteed incomes for life. But what they all have in common is that you’re guaranteed to keep receiving an income for as long as you live. We've put together some tips to help you work through your options.
We're not recommending a particular retirement option, or course of action, over another.
For some products, like annuities, it’s important to shop around so you can get the highest possible income. Yours or your partner’s health and lifestyle can increase the amount of income you or your partner can get. Different providers might use different criteria to assess yours or your partner’s health and lifestyle conditions. This is known as an enhanced annuity. Prudential don't offer enhanced annuities but you might qualify for an enhanced annuity with another provider and get a higher income. That’s why it’s very important that you should shop around.
We recommend you take advice from your financial adviser or get guidance to help you understand your retirement options:
Getting financial advice
Before making any decisions you should speak to your financial adviser. They can advise you what to do. If you don’t have an adviser, please visit pru.co.uk/find-an-adviser to find one.
Guidance is available
Pension Wise is a free and impartial guidance service offered by the Government to help you understand your retirement options. The service is available at moneyhelper.org.uk/pensionwise, by phone on 0800 280 8880 or face-to-face by appointment.
Be mindful that investment scams exist and so it's important to be vigilant and carefully check the facts before deciding what to do with your money.
If you're a member of an occupational pension scheme2, the options available to you may vary, so please contact your scheme provider.
1 A company pension scheme where the pension an employee receives is linked to their length of scheme service and size of their salary as defined in the scheme rules. They are often referred to as final salary schemes.
2 A pension scheme provided (sponsored) by an employer for its employees. Occupational pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).