An annuity is a product from an insurance company that pays you a regular income in retirement. It helps make sure you do not run out of money, even if you live for many years. You pay money in (called your purchase payments), and then the annuity gives you regular payments back. These payments can last for the rest of your life.

 

A guaranteed annuity is an annuity that gives you a set income for life. You know how much you will get, and that amount will not change. This can help you feel more secure about your retirement income.

 

For more details, see Pension benefits with a guarantee (gov.uk).