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Annuity income: understand the quote features

Distinguish lifetime and fixed-term income, payment features and dependants’ provision before interpreting a quote. No provider ranking or purchase recommendation.

All Pensions Editorial TeamPublished Updated 2 min read

General information, not personal financial advice. Sources checked 2026-10-04. No independent specialist review is claimed. Tax year context: 2026/27. Tax information is general; we do not assess your personal tax position.

An annuity converts pension money into income

MoneyHelper explains that an annuity converts some or all of a defined contribution pension into taxable income. A lifetime annuity pays for life; a fixed-term annuity pays for an agreed period. Once the cooling-off period ends, changing your mind is typically not possible.

Start by identifying which option the document describes. A quote is not an application or proof that a purchase has been completed. Keep its date, validity wording and unanswered questions together.

Sources: MoneyHelper: Annuities explained

Income figures need the features beside them

MoneyHelper describes level or increasing payments, payment frequency, joint-life arrangements and optional protections. These features affect what is offered; a headline annual amount alone is not a complete description.

For each quote, retain the original income period and the selected features. Ask what happens at the end of a fixed term and what, if anything, is payable after death. Do not silently treat two different sets of features as equivalent.

  • Lifetime or fixed term, and which payment period?
  • Level or increasing income, with which stated conditions?
  • What does the quote say about dependants, guarantees and the end of the term?

Sources: MoneyHelper: Annuities explained

Keep the decision separate from the record

MoneyHelper notes that annuity rates change and depend on the amount converted and personal and market factors. This guide does not predict a rate, assess your health, choose protections or recommend a provider.

Keep gross quoted income distinct from payments after tax. The tax context is source-checked for 2026/27, but this guide does not calculate liability, determine benefits or assess suitability. Use Pension Wise or appropriate individual advice to understand unresolved decisions before signing instructions.

Sources: MoneyHelper: Annuities explainedGOV.UK: Help with retirement income

Sources & review

Next scheduled review: 2027-01-04. Provider details can change sooner. Use the official website for the current contact route.

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