Use this annuity calculator to see how much guaranteed income your pension pot could buy. Enter your pot, how much tax-free cash you will take and an annuity rate, and it shows your yearly and monthly income after Income Tax, taking your State Pension into account.
Your annuity income
- Tax-free lump sum
- –
- Annuity a year (before tax)
- –
- Annuity a year after tax
- –
- After tax a month
- –
In the example, a £200,000 pot with 25% taken as tax-free cash leaves £150,000 to buy an annuity. At a 7% rate that pays £10,500.00 a year. On top of the full new State Pension, the income after tax is £8,404.48 a year, or £700.37 a month.
How to use the pension annuity calculator
- Enter your pension pot from your latest statement.
- Choose the tax-free cash to take first, up to 25%.
- Enter an annuity rate. 7% is only an example. Get quotes from the open market for your age and health.
- Enter your other income, such as the State Pension, so the tax is right.
What affects annuity rates?
- Age: the older you are when you buy, the higher the rate.
- Health and lifestyle: smokers and people with conditions such as high blood pressure or diabetes can get an enhanced annuity that pays more.
- Inflation protection: an income that rises each year starts much lower than a level one.
- Joint life: continuing to pay a partner after your death lowers the starting rate.
- Guarantee periods and value protection also reduce the rate slightly.
- Interest rates: annuity rates follow long-term gilt yields.
Pension annuity calculator UK examples
| Pot | Tax-free cash | Annuity a year | After tax a month |
|---|---|---|---|
| £50,000 | £12,500 | £2,625 | £175 |
| £100,000 | £25,000 | £5,250 | £350 |
| £200,000 | £50,000 | £10,500 | £700 |
| £300,000 | £75,000 | £15,750 | £1,050 |
| £500,000 | £125,000 | £26,250 | £1,750 |
Change the rate in the annuity calculator to compare quotes. A rate of 6% instead of 7% cuts the income by about one seventh.
Types of annuity
- Level annuity: the same income every year. Highest starting income, but it loses buying power to inflation.
- Escalating annuity: rises by a fixed rate or with inflation each year. Lower starting income.
- Enhanced annuity: higher income if you have health or lifestyle conditions.
- Joint life annuity: continues to pay your partner after you die.
- Fixed-term annuity: pays for a set number of years, then returns a lump sum.
Shop around before you buy
You do not have to buy an annuity from your pension provider. Comparing quotes on the open market, and declaring any health conditions, can increase your income for life. MoneyHelper has a free annuity comparison tool, and Pension Wise offers free guidance to people aged 50 and over.
Once you have a quote, put the rate into the annuity calculator to see the income after tax, which is the figure that matters for your budget.
Annuity or drawdown?
An annuity gives a guaranteed income for life, however long you live, but once bought it usually cannot be changed. Drawdown keeps your pot invested so you can vary your income, but it can run out. Many people mix both. Compare the two with our pension drawdown calculator.
Related pension calculators
Find out when your State Pension starts with the state pension age calculator, and check tax on a lump sum with the pension tax calculator.
Frequently asked questions
How much annuity will £100,000 buy?
At 7%, about £7,000 a year before tax, or about £7,000 with no tax-free cash. After taking 25% tax-free cash it is £5,250 a year.
Is annuity income taxable?
Yes. Annuity income is taxed like a salary, through PAYE. The tax-free cash you take before buying is not taxed.
Can I get an annuity at 55?
You can access a pension from 55 (rising to 57 from April 2028), but rates are lower at younger ages because the income is expected to be paid for longer.
What is the annuity rate?
The yearly income as a percentage of the amount used to buy it. A 7% rate on £100,000 pays £7,000 a year.
About this calculator
This annuity calculator uses 2026/27 tax rates and the £268,275 lump sum allowance, checked against MoneyHelper on 9 November 2026. It does not give quotes. Results are estimates for planning.