How do I purchase an annuity?

An annuity gives you a guaranteed income, for either life or a set period. You can use your pension to buy an annuity from an insurer. Based on the value of your pension, an insurer will work out how much income you’ll get.

Anyone over the age of 55 (increasing to 57 from 6 April 2028) with at least £5,000 in their pension can purchase an annuity or earlier if you’re accessing your pension early on the grounds of ill health.

It’s important to do your research when purchasing an annuity as once you’ve purchased one you can’t change your mind.

If you’re considering purchasing an annuity, we suggest speaking to Pension Wise, which is a free service backed by the government. They offer impartial guidance to people over 50.

You buy your annuity from an insurer, rather than Monzo. Once you’ve found an annuity quote that you’re happy with you’ll need to complete the relevant application with your chosen insurer.

We’ll then send the money in your Monzo Pension to your new provider, and your annuity should be set up within 30 days.

What are my options?

When you've chosen your annuity provider, you have some options to choose from in terms of how/if you take some of your pension as a lump sum.

Your options are:

Option 1

A Tax-free lump sum will be paid to you by FNZ Securities Ltd (the pension administrator). We'll pay the lump sum directly into your Monzo bank account. The open market option value will be forwarded to the new provider.

You can choose from the following:

Option 1 – with maximum tax free cash Option 1 – with a specified amount or percentage of tax free cash

Option 2

No tax-free lump sum will be paid to you by FNZ Securities Ltd (the pension administrator). The open market option value will be forwarded to the new provider.

I’ve chosen my annuity provider, do I need to let you know?

Yes. Once you’ve chosen your annuity, please let us know by completing this form.