GAR (Guaranteed Annuity Rate)
A guaranteed minimum annuity rate attached to some older pension policies, often far more generous than anything available on the open market today.
GARs were offered on personal pensions and retirement annuity contracts sold in the 1970s-1990s, when interest rates were much higher. A typical GAR might guarantee 11-15% annuity rate at retirement, compared to market rates of 5-7% today. This means a GAR can give roughly double the income of a market annuity.
GARs are often extremely valuable — potentially worth tens of thousands of pounds — and are permanently lost if the policy is transferred. This is the single most important thing to check before consolidating or transferring any old pension. Where the GAR exceeds prevailing market rates, regulated advisers will typically recommend keeping the policy in force; an FCA-regulated adviser can quantify the value of a specific GAR against alternatives.
This calculator provides estimates based on 2026/27 tax rates and is not financial advice. Scottish taxpayers are subject to different income tax rates and bands. The calculations assume your salary is your only source of income and do not account for benefits in kind or other taxable income.
For personalised guidance on your pension contributions, speak to an FCA-regulated financial adviser. You can find one via Unbiased or VouchedFor.