Annuity calculator
An annuity turns your pension pot into a guaranteed income for life. This gives a rough idea of what a pot could buy, using illustrative rates you can change for single or joint life and level or rising income.
How an annuity works
You hand an insurer your pension pot and, in return, they pay you a set income for the rest of your life. The size of that income is the annuity rate, shown as a percentage of the pot. A 7.9% rate means a £100,000 pot pays £7,900 a year. The trade-off is certainty against flexibility: the income is guaranteed and never runs out, but you give up access to the capital.
Worked example
A £100,000 pot at a single-life level rate of 7.9% buys about £7,900 a year, or £658 a month, for life. Choose joint life so a partner keeps an income after you die and the rate falls to around 7.1%, giving a lower starting income. Choose a rising annuity to protect against inflation and it starts lower still, near 5.4%, but the payments grow each year.
Level or rising
A level annuity looks generous at the start but loses purchasing power every year as prices climb. A rising annuity starts smaller yet defends your standard of living over a long retirement. Someone in poorer health, expecting a shorter retirement, often prefers the higher level income, while a healthy person planning for thirty years may value the escalation.
Common questions
What income will my pension buy as an annuity?
It depends on the annuity rate, which moves with interest rates and your age and health. On an illustrative 7.9% rate, a £100,000 pot buys about £7,900 a year for life. Rates in 2026 have been near their highest for well over a decade, so it pays to shop around the whole market.
What is the difference between single and joint life?
A single-life annuity pays you until you die and then stops. A joint-life annuity keeps paying a share, often half, to your partner after you die. The protection costs income, so a joint-life rate is lower than a single-life one for the same pot.
Should I choose a level or escalating annuity?
A level annuity pays the same amount every year, so it starts higher but inflation erodes it. An escalating annuity rises each year, often by 3% or in line with prices, so it starts lower but holds its value. The right choice depends on how long you expect to live and how much you fear inflation.
Are these figures a quote?
No. The rates here are illustrative and editable, meant to show how the numbers move. A real quote depends on your exact age, health, postcode and the options you pick, and enhanced rates for health conditions can be considerably higher. Always compare live quotes before you buy.