Annuity income from a £500,000 pot — half a million, fully secured.

A £500,000 pension pot is in the top quartile of UK defined contribution wealth. A single life level annuity at 65 might produce around £32,000-£35,000 per year — nearly £2,900 per month. Combined with the state pension, total income exceeds £43,000, comfortably above the PLSA comfortable standard. At this level, full annuitisation is rarely recommended. The annuity income alone (before state pension) would push you into the higher-rate tax band at 40%. A blended strategy — annuitise £200,000 for security, drawdown £200,000 for flexibility, take £100,000 tax-free — allows you to manage your tax position by varying drawdown withdrawals year to year. The lump sum death benefit argument also matters: annuity income dies with you (or your spouse for joint life), while drawdown funds can be inherited. At £500,000, getting regulated financial advice is strongly recommended.