What does the Annuity Calculator — Retirement Income do?

Estimate annuity income from your pension pot. Compare single and joint life annuity rates by age. All calculations are performed in your browser using official UK rates and thresholds.

Are these figures guaranteed?

No. Pension projections are estimates based on assumed growth rates and current contribution levels. Actual returns depend on investment performance, fees and future policy changes.

What is the pension annual allowance?

The pension annual allowance for 2025/26 is £60,000. This is the maximum you can contribute (including employer contributions) and receive tax relief. The allowance is tapered for high earners.

Annuity Calculator — Retirement Income

Estimate annuity income from your pension pot. Compare single and joint life annuity rates by age.

Last updated: April 2026 · Source: GOV.UK

Pension Pot

Age at Purchase

Take 25% tax-free lump sumJoint life annuity (continues paying spouse)

Estimated Annual Income

£9,300.00

£775.00/month · 6.2% annuity rate

Tax-Free Lump Sum

£50,000.00

Annuity Purchase

£150,000.00

Type

Single Life

Indicative rates only. Actual annuity rates vary by provider, health and features. Shop around using the Open Market Option.

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Annuity rates are calculated by insurers based on your pension pot size, age at purchase, health status, and chosen options. The insurer invests your lump sum and pays you a guaranteed income for life, using actuarial life expectancy tables and current gilt yields to determine the annual payout. A larger pot, older age, or poor health typically produces a higher annual income.

You select between a single-life annuity (pays only you) or a joint-life annuity (continues paying a spouse at a reduced rate, typically 50-66%). Level annuities pay a fixed amount, while escalating annuities start lower but increase each year by a fixed percentage or in line with RPI, protecting against inflation erosion over a 20-30 year retirement.

The calculation divides your pot by an annuity factor derived from mortality tables and the selected options. Guarantee periods (typically 5 or 10 years) ensure payments continue to beneficiaries if you die early, but reduce the headline rate slightly. Enhanced annuities for smokers or those with medical conditions can pay 20-40% more than standard rates.

Annuity income from a £200,000 pension pot at age 65

Pension pot value: £200,000
Single-life, level annuity rate at age 65: approximately 6.8%
Annual income: £200,000 x 6.8% = £13,600 per year (£1,133/month)
If joint-life (50% spouse) selected instead: rate drops to approx 5.9%, giving £11,800/year
If RPI-linked escalation chosen: starting income drops to approx £9,400/year but rises annually with inflation

Source: GOV.UK

Frequently Asked Questions

What does the Annuity Calculator — Retirement Income do?: Estimate annuity income from your pension pot. Compare single and joint life annuity rates by age. All calculations are performed in your browser using official UK rates and thresholds.
Are these figures guaranteed?: No. Pension projections are estimates based on assumed growth rates and current contribution levels. Actual returns depend on investment performance, fees and future policy changes.
What is the pension annual allowance?: The pension annual allowance for 2025/26 is £60,000. This is the maximum you can contribute (including employer contributions) and receive tax relief. The allowance is tapered for high earners.