There are a number of different types of annuities but they all pay a guaranteed income for life.

Peace of mind that you will always have an income.

A set retirement income

Guaranteed income for the rest of your life

Plan ahead

Get an income for your dependants after you die

Peace of mind

You know how much you’ll be getting and when

Key features and benefits

  • Take a tax-free cash sum of normally up to 25% of the value of your existing pension fund.
  • You can choose to have monthly, quarterly, half-yearly or yearly income payments.
  • Optional five or 10 year guaranteed period, making sure income continues to be paid if you die during that time.
  • Income for dependants can be paid to your surviving husband, wife, registered civil partner or other dependant after you die.
  • Enhanced annuity option offering a guaranteed income which takes into account your health and lifestyle and could provide you a higher income.

Things to be aware of

  • Before committing to buying an annuity, you should consider all of the pension options that may be available to you and shop around with other providers.
  • In some circumstances inflation could reduce what you could afford to buy with your income.
  • The amount of income you get back may be less than the cost of buying the annuity.
  • You can't cash in your plan or change the basis of your income.
  • If you transfer from another plan any guaranteed benefits associated with this would be lost on transfer.
  • When you die, your income will normally stop.

Frequently asked questions

There are a number of different types of annuities and most will pay a guaranteed income for life. You also have the option to ensure your dependant would receive an income from your annuity after your death, which would continue for the rest of their life. We offer Standard Annuities and an Enhanced Annuity, which can offer you a higher income because it takes account of your health and lifestyle.

With a standard annuity, the income you will receive is largely determined by your age, where you live and interest rates.

An enhanced annuity offers a level of guaranteed income which also takes into account your health and lifestyle. You might get a higher level of income if you have a medical condition or lifestyle that could reduce your life expectancy.

Even if you think you are healthy, if you are a smoker, overweight or taking any medication, you could receive a higher income than a standard annuity.

A list of qualifying medical conditions and lifestyle factors can be found here.

You can choose to have your income paid monthly, quarterly, half-yearly or yearly which can be made:

  • In advance – Where the first payment will be made as soon as possible after your policy has been set up.


  • In arrears – If you choose monthly payments the first payment will be one month after your policy has been set up.

Your income can:

  • be a fixed amount (in other words, it doesn’t increase each year)
  • increase at a fixed rate each year( for example, 3%)
  • vary each year in line with the Retail Prices Index (RPI), if RPI is negative, your income could go down as well as up.

You can guarantee your annuity for either 5 or 10 years. If you choose this option, it means the income will continue to be paid even if you die before the specified period is up.

Selecting a guarantee period will provide a slightly lower level of income, but it guarantees that your estate continues to receive the income.

If you've chosen a dependant's income and the dependant is still alive when you die, we will start to pay their income in line with how you set up your annuity.

If you die before age 75, any income paid to a dependant will be paid free of income tax.

If death occurs after age 75, income will be paid to your dependant net of income tax at their marginal rate.

A dependant can be your surviving husband, wife, registered civil partner or other dependant.

Any costs for advice and services from a financial adviser can be paid to them from your plan via an adviser payment.

Our charges have been taken into account when we calculated your income.

With annuities you could get a higher income by shopping around.

It’s important to check whether you are eligible for an enhanced annuity, as you could get a higher income based on your health or lifestyle. Medical conditions and lifestyle factors taken into account will generally be the same across providers, although some providers will accept different conditions.

It is likely that each provider will apply a different approach to underwriting health conditions and this could result in a higher or lower income being offered by them.

Other types of annuities with a range of options will be available, however not all pension providers will offer them. So you must think carefully about what you want from an annuity as you cannot change your mind once you have bought it.

Other types of annuity include:

  • investment-linked annuity – Offers the chance of a higher income but there is investment risk and the income could go down
  • value-protected annuity – Returns a lump sum to your beneficiaries if you die without having received a return of the purchase price used to buy the annuity
  • fixed-term annuities – Provides you an income for an agreed amount of time, usually between three and 20 years. It may also pay a specified 'maturity amount' when it ends which can be re-invested in another retirement plan.

Please note, these types of annuity are not available from Scottish Widows.

Our annuities are only available to our existing pension plan customers, unless you apply through a financial adviser.

If you're an existing pension plan customer, contact us on 0345 835 6644.

If you don't have a financial adviser find one here.

Selecting how to take the right retirement benefits for you is probably one of the most important financial decisions you’ll make in your lifetime.

A financial adviser will be able to help you choose the route which best suits your retirement goals.

Please note: you may be charged for advice or services provided by a financial adviser.

From 1 March 2018, if you ask us for an annuity quote, we will also let you know the best available annuity from all pension providers. All you have to do is give us your consent to share your details with other pension providers, and you can see whether you might be able to get a higher income elsewhere. We also think it’s a good idea that you shop around before you make your decision, to help you get the best outcome. Why not visit the Money Advice Service for advice, tips and tools to help you make an informed decision. It’s an independent site set up by the Government to help you make the most of your money by giving you free, impartial advice.

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