From April 2015, whatever the size of your pension pot, the Government proposes that you may be able to take it in the form of your choice, subject to income tax, giving greater flexibility. We recommend you seek independent financial advice. A financial adviser will inform you of the fee they charge for this service.
What is an annuity?
An annuity is a guaranteed income for the rest of your life. It is the most popular way people buy a pension. Buying an annuity is a one-off decision that will set the level of income throughout your retirement and cannot be changed.
Do I have to take an annuity?
No. When you retire there is a range of retirement options. You can find more information about these by going to Retirement Options.
If I want to buy an annuity, do I have to take one from Equitable Life?
No. As the Equitable Life does not offer annuities, we have teamed up with Canada Life and they will offer you a wide range of annuities at competitive rates. However, you do not have to purchase an annuity with Canada Life. You should shop around as you may get a higher income. You can use the illustration from Canada Life to compare their annuity with what other firms can provide.
How do I get the best annuity?
You can get the best annuity by using the Open Market Option which allows you to take your pension fund to another provider. You have complete flexibility to choose how you take an income in retirement. It allows you to shop around, so you buy an annuity that reflects your personal circumstances.
How do I choose an annuity?
There are many different types of annuity, each designed to suit different personal circumstances. If you plan to buy an annuity, you should consider the following questions:
- Are you married or do you have a partner or another dependant? Will they need an income if you die first?
If so, you should consider a joint-life annuity, which continues to pay an income for both of your lives. A joint life annuity provides a lower level of income than a single life annuity as it is paid over a longer period.
- Do you smoke or do you have a medical condition?
If so, you may be eligible for an enhanced annuity which could pay you a much higher level of income.
- Do you want your income to increase over time to help keep up with inflation?
If so, you should think about an escalating annuity which starts lower but increases over time.
Can I convert my savings into a pension which keeps my money invested?
Yes. This is often described as Income Drawdown or a flexible investment–linked annuity policy. They can give the potential for your income to grow, but it will not be guaranteed and there is a risk that your income will go down.
How can I decide what is right for me?
There is a free online annuity planner at www.pensionsadvisoryservice.org.uk which can help you decide which type of annuity is right for you.
It is very important that you shop around and make a choice which reflects your own personal circumstances. You should consider whether you may be eligible for an enhanced annuity, as this may provide you with a higher level of income. We recommend that you seek independent financial advice to help you make the right decision for you. A financial adviser will inform you of the fee that they charge for this service.
What is the Canada Life arrangement?
As Equitable Life does not offer annuities, we have teamed up with Canada Life. When you come to take your pension, you will be offered a wide choice of annuities from Canada Life at competitive prices. You do not have to purchase an annuity with Canada Life. By shopping around you may get a higher income. You can use the illustration from Canada Life to compare their annuity with what other firms can provide. You should shop around and ensure that you make the decision that will provide you with the best income in retirement.
Where can I find more information about Canada Life?
The best place to look is at the questions and answers.
If I have received a quote from Canada Life, do I have to accept it?
No. We encourage you to shop around to find the right annuity for you.
Can you provide advice on which annuity to buy?
No, the Society is unable to provide advice. We therefore recommend that you seek independent financial advice. A financial adviser will inform you of the fee that they charge for their service. To find Independent Financial Advisers in your area, the website www.moneyadviceservice.org.uk is very helpful.
The Pensions Advisory Service is also able to provide you with free impartial information and guidance on all pension matters. Their telephone number is 0845 601 2923 and their website can be found at www.pensionsadvisoryservice.org.uk.
Are annuity rates the same for men and women?
Yes they are. On 21 December 2012, new legislation came into effect which prevents pension providers in the EU from taking gender into account when working out the retirement income purchased by individuals.
Who can I contact if I need more information?
You can contact us from 09.00 until 17.30 Monday to Friday on 0845 603 6771. Or you can write to us at: