When you want to turn your pension pot into a regular pension income you have to buy an annuity.
This is a pension you buy from an insurance company. You hand over your pension fund to them and in return they pay you a regular pension until you die (and - if you have chosen a joint annuity - your surviving dependant too).
Annuities can vary a great deal between companies. Not only can they work in different ways, they can also vary in how much pension they provide for the same pension pot.
You are entitled to shop around for the annuity which best suits and provides the best value for you. This is known as the Open Market Option (OMO). You should always consider whether you could get better value elsewhere before accepting an annuity from your pension provider.
You can download a very helpful guide to Making your retirement choices from the Pensions Regulator’s website.
