Once you’ve retired, you’ll need to convert your pension into a regular income. A popular way to do this is to buy an annuity. An annuity is simply a type of policy that provides you with a regular taxable income for life, in exchange for a lump sum payment. A Scottish Widows annuity lets you take out a tax-free cash sum, then convert what’s left into a taxable income.
Features & benefits
- Straightforward and easy to understand
- Available for pension funds of all sizes
- Your income is guaranteed for life
- You may also provide an income for a spouse or dependant (if applicable).
- No need to monitor your investment
- No risk of stock market falls, or economic slumps
- Choose to have your income paid, monthly, quarterly, half yearly, yearly, in advance or arrears
- You can decide to buy an annuity from age 55, even if you’re still working
The level of income you receive from your pension plan will depend upon a number of factors including the value of the plan when you decide to take your pension, which isn't guaranteed and can go down as well as up.
The value of any tax benefits of your plan depend on your individual personal circumstances. Your circumstances and tax rules may change in the future.