Shop around

As a result of pension freedoms it’s even more important for you to shop around whether you are buying an annuity or another type of retirement income product.

Shopping around for the best deal

Choosing a retirement product is an important decision that you cannot afford to get wrong.

From the age of 55 you’ll be able to access the money in your pension pot in a number of different ways. It’s good to have choices when it comes to pensions and your retirement, but it’s also important to understand all your options.

For example, you might want to:

  • have a guaranteed income for life (annuity)
  • Flexible Access to your funds (Flexible Drawdown).


With annuities you could get a higher income by shopping around and not taking an annuity directly from your pension provider.

Also, it’s important to check whether you are eligible for an enhanced annuity, as you could get a higher income based on your health or lifestyle. Medical conditions and lifestyle factors taken into account will generally be the same across providers. It is likely that each provider will apply a different approach to underwriting health conditions and this could result in a higher or lower income being offered by them.

Other types of annuities with a range of options will be available however, not all pension providers will offer them. So you must think carefully about what you want from an annuity as you cannot change your mind once you have bought it. Other types of annuity include:

  • Investment Linked Annuity – pays an income for life, offers the chance of a higher income but there is investment risk
  • Value Protected Annuity – you can choose this option at the start when you take out your annuity it returns a lump sum to your beneficiaries if you die without having received the full value of your pension fund
  • fixed-term annuities - this type of annuity, gives you an income for an agreed amount of time, usually between 3 and 20 years. It may also pay a specified 'maturity amount' when it ends which can be re-invested in another retirement plan.

Flexible Access

If you are considering another retirement product such as Flexible Drawdown, then you must think about the:

  • product features
  • charges, and
  • investment choices.

These will vary between providers so it is always worth checking what is available in the market.

How to shop around

Check what your current pension pot with your provider offers. Most pension providers offer annuities and you will have received a pack telling you about this. If you know the amount of annuity income they are offering you, use this as a guide to compare what you could get elsewhere.


Remember to make sure you compare like with like, so don’t compare an annuity for you with a joint life annuity from another provider.

Use our tools, interactive case studies and comparison table to help provide indication of what might be available.

Information you will need

When you shop around there are key pieces of information you should consider and have ready:

  • age when you wish to take benefits
  • value of your pension pot
  • will you be taking your tax-free cash sum (up to 25% of your pension pot tax-free)?
  • any other pension pots (it might be worthwhile to combine them)
  • are you married, have a partner or dependant/beneficiary that you wish to provide income for after you die?
  • are you concerned about inflation reducing the value of your retirement income product?
  • do you have any lifestyle factors (e.g. smoking) or medical conditions that may mean you are eligible for an enhanced annuity?

Return to: Calculators

Need to take another look at your figures before you consider what to do next?

Retirement calculators

Taking your money

If you’ve made a decision on your pension savings, use our checklists to make sure you’ve got all the important bits covered.

Ready to choose

Combine your pensions

Got more than one pension? Then you could think about putting them all in one place. Combining your pensions with Scottish Widows is simple and we won't charge you for this service.

Pension transfers