If you’ve saved into a defined contribution pension scheme during your working life, you’ll have to decide what to do with the pension fund you’ve built up when you approach retirement age. One option is to buy a lifetime annuity (often called just an annuity).
An annuity converts your savings into an annual pension, giving you a guaranteed income for life, or a specified period.
You don’t have to purchase an annuity if you don’t want to. Instead, if you have been a member of a defined contribution pension scheme, you have various options for your pension pot.
These other options may affect your decision about whether to buy an annuity, so consider them carefully.
If you do decide to buy an annuity, you don't have to buy one from your pension provider, and you should shop around. However, you can start by checking what your pension provider is offering, because they may still offer a higher payment rate than those available elsewhere.
Contact The Pensions Advisory Service for free information and guidance on comparing annuities from different providers