What is a guaranteed annuity rate and how does it compare to other annuity rates?

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Some pension plans offer a guaranteed annuity rate when you open them. If you have this benefit, it means your plan will guarantee to offer you a particular annuity rate, even if the market rate is different. It's important to check if you have this benefit as it may give you a much higher pension than you'd get by buying one in the open market.

It's important to note that you’ll lose your right to the guaranteed annuity rate if you:

  • take all your fund as cash;
  • transfer to another pension provider;
  • take an open market option, or
  • transfer to one of our platform products.

If you choose to take the open market option, there's no guarantee that when you do purchase an annuity the rates will be favourable, as annuity rates can change substantially and rapidly. This could mean that your pension thereafter may be less that you hoped for.

We understand that choosing the right retirement option for you can be daunting, and we strongly recommend you get guidance or advice to help with your decision.

Pension Wise, a free and impartial government service, can give you guidance to help you understand your options at retirement. This service is available via the internet, telephone or face to face. You can contact them at pensionwise.gov.uk(Opens new window) or on 0800 138 3944.

To find out if your plan offers a guaranteed annuity rate, please contact us or your financial adviser. If you don't have a financial adviser, you can find one in your area at unbiased.co.uk(Opens new window)

Any guarantees are based on the ability of the issuing insurance company – in this case Scottish Equitable plc - to pay them. If, for example, that company no longer existed, then the guarantees it provides would be affected.