Whilst there are many annuity providers in the market, the types of annuities available generally fall into one of three categories; lifetime annuities, fixed term annuities and enhanced annuities.
Lifetime annuities give you a defined regular income which is guaranteed for the rest of your life. There are a number of options you can add to a lifetime annuity to protect your income for your family members if you pass away.
Sometimes called a short term annuity, these give you a regular income for a defined time, for example five or 10 years. Find out more about fixed term annuities.
An enhanced annuity could mean you receive an income up to 30% higher than a lifetime annuity if you're in poorer health. Like a lifetime annuity, enhanced annuities pay a regular, defined income until you pass away. Find out more about enhanced annuities.
What do I need to consider before buying an annuity? Once you buy an annuity, you can't normally change any part of it which is why you need to be sure you’ve made the right decisions before you commit.
You may be able to opt for a drawdown pension or a unique blend of options instead of an annuity.
A drawdown pension lets you take an income from your pension fund which will continue to be invested until you buy an annuity.
A financial adviser or one of our pension specialists will be able to help you create the right combination of options for your personal retirement needs.
You should shop around
When the time comes to take money from your pension, your provider will send you an annuity offer. However, before you accept it you should shop around, seek advice and get a few alternative quotes.
If you have more than one pension plan you could buy more than one annuity and take them at different times. Or you might be better off combining your funds into a single annuity. It depends on your personal and financial circumstances, the state of your health, and what you want from your retirement income.