Pensions and Retirement Frequently Asked Questions

What flexible options are available with an annuity?

Answer

Your annuity will have a number of flexible options which you can choose to take. Some of these may affect the amount you receive.

Payment frequency

You can choose how often you want to receive your income: monthly, quarterly, half-yearly or yearly.

Annual increase

You can decide whether your annuity will pay a fixed income or one that increases to protect you against inflation. A level annuity may provide a very comfortable income today. However in ten or twenty years’ time inflation will reduce its value substantially. An escalating annuity which increases with inflation will initially provide a lower income, but its value over the years will give you consistent buying power for life. Alternatively, you can select a fixed percentage increase – say for example 3% - which would provide a consistent annual increase year on year regardless of whether inflation is higher or lower. 

Other Options

You may also consider adding value protection and guarantee periods to your annuity to protect the value of the fund used to buy your annuity for a family member or beneficiary in the event of your death.

Further information on Annuity, click here.

 

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