A guaranteed annuity rate (GAR) is a promise, written into some older pension policies, of a set rate when you turn the pot into an annuity.

If you are asking what a guaranteed annuity rate is because an old policy has turned up, the short version is that it can pay much more than shopping around would, and it can be lost if the money is moved or taken another way. This guide explains what a GAR is, how to find out whether you have one, how to work out what it would pay and where the rules on advice come in.

Before any decision, Pension Wise, from MoneyHelper, offers free guidance on taking a defined contribution pension; MoneyHelper describes the service as free and impartial, and backed by the government. If you would rather have an FCA-authorised adviser read your policy papers beside your other retirement income, the free form on this page is there for that.

What a guaranteed annuity rate is

An annuity pays an income for life, and the annuity rate is the factor that sets how much. MoneyHelper puts it this way: "An annuity is a regular income paid to you for life and the annuity rate is the factor that determines how much annual income you get." Most of the time that rate moves with the market. A guaranteed one does not:

A guaranteed annuity rate is one that was set in the terms and conditions of your pension policy when you took the policy out. This means the rate offered may be higher than rates available today.

— MoneyHelper, Guaranteed annuity rates, read via the Internet Archive (snapshot of 17 October 2025), accessed 18 October 2026

The FCA's Handbook glossary describes it as an arrangement under which, in defined circumstances and "irrespective of the prevailing market rate for annuities", a member is entitled to "an annuity at a minimum specified rate". So a GAR sits in the terms of one particular policy. MoneyHelper says "Most policies that offer a guaranteed annuity rate were marketed in the 1980s and 1990s, when annuity rates at the time were higher."

How high are they? MoneyHelper's guide (archived copy of 17 October 2025) says "Common rates offered are around 9 to 11% (occasionally higher)", meaning that "for every £100 of pension pot you have, you would get £9 or £11 as income a year". That describes what older policies commonly promise. It is not a current market rate or a rate anyone is quoting you, and your own policy has its own figure. For how annuities work generally, see what a pension annuity is, and for how rates have moved over the decades, UK annuity rates through history.

Conditions that come with a GAR, and how it can be lost

Because the rate is set in the terms of your policy, it applies only on those terms. MoneyHelper warns that "If you do have a guaranteed annuity rate, there might be restrictions on when you can take it." Its examples:

  • A set retirement date. "Some policies only offer the rate at your selected retirement date, not if you want to begin taking money before or after this."
  • A window or a minimum age. "Other policies might have a more generous window of several months, or just a minimum age."
  • The shape of the annuity. "The terms and conditions could also restrict the type of annuity you can take. If you want to include a continuing income for a nominated dependant, such as a spouse, or an increasing income, the guarantee might not apply or the rate could be lower."

The same page adds that "whatever the restriction, make sure you know about it beforehand." These are examples from one guidance page, not a full list, and your policy may have others. If you want an income that rises each year or carries on for a partner, read how inflation-linked annuities compare and joint life annuities next to your GAR terms, because the guarantee may not cover that shape.

Moving the money is the other way to lose it. With a GAR, MoneyHelper says, "the amount of income you receive could be much higher if you stay with your current provider rather than shopping around", and the provider "must make you aware of this as you approach retirement and before you begin taking money from your pension or request to move your pension elsewhere." The law adds a written warning before a transfer, a switch to flexible benefits or a cash lump sum (see the advice rules below). Our guide to how to transfer a pension covers the mechanics, and whether a GAR is worth keeping looks at the weighing-up.

How to find out whether your pension has one

Start with what the provider is meant to tell you. MoneyHelper says that if you have a GAR, "your pension provider must make you aware of this as you approach retirement", and that "They'll usually send you a retirement pack at various points from the age of 50 onwards. This should provide information about any guaranteed annuity rate that might be available to you." You can also look at "the information you were given when you joined the pension".

It is not always that simple. MoneyHelper: "It's not always easy to find out if you have a guaranteed annuity rate. Check your paperwork carefully, look for language like 'retirement annuity contract', 'Section 226 policy' 'with-profits', 'benefits', 'preferential' or 'guarantee'. It's also a good idea to ask your pension provider directly." Its annuities guide gives the same list of terms and says you can usually find out by "contacting your provider".

If you are not sure which provider holds an old policy, see how to find a lost pension first. When you write or phone, these questions cover the ground:

  1. Does this policy include a guaranteed annuity rate, and what is it?
  2. On what date, or within what window, or from what age, can I use it?
  3. Does it apply to the kind of annuity I would want: level or rising, single or with a partner's pension?
  4. What income would it produce on my pot today, in writing?
  5. What happens to the guarantee if I transfer, defer or take the money another way?

Keep the replies. Vague replies or thin paperwork are a reason to get a second pair of eyes. The enquiry form on this page asks an FCA-authorised adviser to take a look at the policy.

How to work out what a guaranteed annuity rate would pay

The sum is simple once you have the figures. MoneyHelper says a GAR means "you can buy an annuity at a particular percentage rate", so the yearly income is that rate applied to the money the guarantee covers: on the illustration quoted above, £9 or £11 a year for each £100. The rate for your own policy is whatever your policy says.

The harder part is the sum the rate applies to, and the terms attached, which only the provider can confirm. That is why a general calculator is a poor guide. Ask for the income in writing, as in the list above, and compare it with the offers the open market gives you. MoneyHelper is clear on this: "Whether or not your provider offers guaranteed annuity rates, always compare how much different providers will offer you." For what a pot might buy without a guarantee, see how much annuity income a pot buys, and for the effect of health on offers, enhanced annuity rates.

Advice and risk warnings: the rules for a GAR

In Great Britain, section 48 of the Pension Schemes Act 2015 says that where a member has "safeguarded benefits", the trustees or managers "must check that the member or survivor has received appropriate independent advice" before a transfer, a conversion to flexible benefits or an uncrystallised funds pension lump sum. Regulation 5 of SI 2015/742, in the wording substituted from 6 April 2018, lifts the check where "the transfer value of the member's or survivor's subsisting rights in respect of safeguarded benefits under the pension scheme is £30,000 or less on the valuation date." Transferring a pension explains how the check works.

A policy with a GAR is caught by those rules. The FCA's Handbook gives "safeguarded benefits" the meaning in section 48(8) of the Act and treats a GAR as one: its rule that transfer advice has to come from, or be checked by, a pension transfer specialist "does not apply where the only safeguarded benefit involved is a guaranteed annuity rate" (COBS 19.1.1A), and a firm "may not give abridged advice to the extent that the safeguarded benefits involved are guaranteed annuity rates" (COBS 19.1A.2). SI 2015/742 deals with benefits like these as "safeguarded-flexible benefits" (in the words of the explanatory note to SI 2017/717, "safeguarded benefits which are also flexible benefits") and counts "a guaranteed conversion rate" among the guarantees concerned. So above a £30,000 transfer value, the scheme must check for advice before any of those three moves. The provider can confirm whether your guarantee falls within these rules.

Whatever the value, there is a second safeguard. Regulations 8A to 8C of SI 2015/742, in force since 6 April 2018, require a written risk warning when a member with safeguarded-flexible benefits asks to make one of those moves, including "a prominent statement that the member's or survivor's benefits under the scheme include a potentially valuable guarantee (or, where relevant, more than one such guarantee) which will be lost if he or she proceeds with the proposed relevant transaction". The duty covers moves where the advice check "would apply but for the exception in regulation 5(1)".

The check and the warning are legal steps for the scheme, not a recommendation to transfer. The FCA says scams often tempt people with attractive offers to move their pot, and that an unexpected call about your pension should simply be ended: FCA, Pension scams.

Questions people ask about guaranteed annuity rates

Is a guaranteed annuity rate the same as a guaranteed annuity?

No. A guaranteed annuity pays an income the insurer has promised, as pension annuities generally do. A guaranteed annuity rate is a promise about the rate at which your pot converts to such an income, written into an older policy.

Are annuity rates guaranteed for life?

The income from a lifetime annuity is. MoneyHelper says you can choose an annuity that pays "a guaranteed income for" the rest of your life (a lifetime annuity) or for an agreed period (a fixed-term annuity). A GAR is different: it fixes the rate in your policy in advance, on the dates and for the annuity types its terms allow.

Is a guaranteed annuity rate the same as a defined benefit pension?

No. A GAR is attached to a policy whose benefits are worked out "by reference to an amount available for the provision of benefits", in the Act's words: a pot, with a promised rate for turning it into income. A defined benefit pension works differently; see final salary pensions.

What is a good guaranteed annuity rate?

MoneyHelper's guide (archived copy of 17 October 2025) describes common rates of around 9 to 11%, a description of older policies rather than a market rate. Whether yours is good depends on how its income compares with open-market offers for your age, health and chosen features.

Are annuity rates good at the moment?

That changes with the market. See where annuity rates are heading and whether an annuity is worth it.

Your next step

A guaranteed annuity rate is a feature of one policy, with terms that decide when and how you can use it. Pension Wise can explain your options free. Should you want the guarantee weighed against everything else you hold, the enquiry form on this page is where to ask for an FCA-authorised adviser.

Sources: MoneyHelper, Guaranteed annuity rates and annuities explained (archived copies); Pension Schemes Act 2015, section 48 and section 74; SI 2015/742, regulation 5 and regulations 8A to 8C; SI 2017/717, explanatory note; FCA Handbook, pension transfers rules and glossary; FCA, Pension scams.