An annuity is a guaranteed income for life that you buy with part, or all, of a pension pot. That sounds simple. The decision is not simple, because buying more certainty can mean giving up flexibility, investment upside, or money that could otherwise be left to your family.
That is why annuities are best understood side by side with the alternative: keeping the pot invested and drawing money from it over time. One route gives more certainty. The other gives more control. A useful planning tool does not tell you which one to choose. It helps you see the trade-off clearly enough to have a better adviser conversation.
Being aware of your financial future is useful in itself
Retirement income decisions can feel abstract because the important dates are years away. A tool makes those dates visible. It can show whether your savings might last, how much income you may need from pensions and savings, and what happens if you choose guaranteed income instead of drawing from an invested pot.
That awareness does three practical things:
- It turns worry into named decisions. Instead of "will I have enough?", you can ask "how much guaranteed income would make me feel safe?" or "what happens if I annuitise half the pot?"
- It shows trade-offs in plain numbers. A higher guaranteed income may reduce flexibility. A flexible drawdown plan may leave more control, but it can run out if markets or spending go against you.
- It makes gaps easier to spot. Unknown pension values, unclear State Pension dates, missing spending targets, or a partner's income needs become visible because the model needs them.
Feature focus: Annuities
The Annuities page is built for one question: what would happen if you turned some of your pension pot into a guaranteed income for life instead of keeping it invested? It compares different annuity shapes with a drawdown reference, using plain labels such as "Most income now", "Keeps pace with prices", and "Half guaranteed, half flexible".
See what an annuity might pay each year after tax, based on the pension pot and retirement timing in your plan.
Compare guaranteed income with keeping your pot invested and drawing from it instead, so the security-versus-flexibility trade-off is visible.
Compare level income, income that rises with prices, options that protect a partner, and blends where only part of the pot is guaranteed.
Turn a package into a full plan so you can see its effect on future savings, income, tax, and what might be left later.
This matters because annuity choices are full of hidden trade-offs. A level annuity may start higher but buy less as prices rise. An inflation-linked annuity may start lower but hold its spending power. A joint-life annuity can keep paying a partner after one person dies, but usually starts lower than a single-life version. Using only one quote can hide those differences.
What an annuity comparison cannot decide for you
It cannot tell you whether giving up access to a pension pot is suitable, whether a particular product is good value, or whether your health, partner, family, tax position, and appetite for risk make an annuity sensible. It can show the shape of the choice. It cannot replace personal advice.
A planning tool helps you prepare. Advice helps you decide.
It is good to use a tool. It is also good to get financial advice when decisions are significant, irreversible, or tax-sensitive. Retirement timing, pension access, annuities, inheritance tax, large gifts, and drawdown choices can all have consequences that a calculator cannot fully judge for you.
A regulated financial adviser can look beyond the model. They can assess suitability, risk, product rules, tax detail, protection needs, family circumstances, and the parts of your life that do not fit neatly into a spreadsheet.
Before acting on major pension, tax, investment, or estate decisions, check that the person advising you is appropriately authorised and regulated. In the UK, you can use the Financial Conduct Authority register for that check.
What to do before an adviser meeting
A simple preparation flow is enough. You do not need perfect data before you start, but you do need enough to make the meeting useful.
Add income, pension contributions, savings pots, target spending, and likely retirement ages.
Try retiring earlier, saving more, working fewer days, changing drawdown order, or buying guaranteed income.
Check how much income would be guaranteed, how much remains flexible, and whether the drawdown plan could run out.
The goal is not to prove that the tool is right. The goal is to bring a clearer starting point. If your adviser disagrees with an assumption, that is useful. You have found exactly where the professional judgement should be applied.
Questions a prepared client can ask
Once you can see your own plan, the conversation becomes more specific. Questions like these are easier to answer when your numbers are already in front of you:
- Would a guaranteed income for life suit my circumstances, or do I need more flexibility?
- Should I use all of my pension pot, or only part of it, to buy guaranteed income?
- How much starting income would I give up if I want payments to rise with prices?
- Should the income continue for my partner if I die first?
- How does an annuity affect what might be left for my family?
- What tax would I pay on annuity income alongside State Pension or defined-benefit pension income?
- What health, lifestyle, product, or timing factors could change the income available to me?
Those are adviser questions, not software questions. The tool helps you find them. The adviser helps you decide what to do with the answers.
Compare guaranteed income before you choose
Open the planner, add your pensions and spending target, then use the Annuities page to compare guaranteed income with staying invested. Treat the result as a planning conversation starter, not a product recommendation.
Important: This article is general information, not financial advice. The planner is a calculator and educational tool. It does not provide regulated financial advice, does not know your full circumstances, and should not be treated as a substitute for advice from a qualified adviser authorised by the Financial Conduct Authority.