What are annuities?

If you’re seeking a regular guaranteed income in retirement, an annuity provides you with exactly that. You can buy a pension annuity to pay a taxable income either for life, or for an agreed number of years.

How does it work?

You may use either some, or all, of your pension savings to purchase a regular and guaranteed income.

There are two main types of income annuities:

1. Single premium immediate annuities

As the name suggests, the income of a single premium immediate annuity begins immediately.

2. Deferred income annuities

The income of a deferred income annuity does not begin for at least 13 months after your last premium payment.
There are a few that factors that determine the amount of income you can expect, and these include (but are not limited to) your age, state of health, your postal code, the common annuity rates, the type of annuity you purchase and the size of your pension fund.

Annuity advantages

There are a few advantages to be gained, including:

A regular, stable and secure income for life


Annuity being tailored to meet your current individual circumstances


We wouldn’t be the best financial advisors if we didn’t give you information about possible problems. These include:

Falling annuity rates could potentially reduce the amount of income that you could get in exchange for your pension fund when you retire.


Payments cease on death, so your family will not be entitled (unless you buy an annuity that continues to pay after you have passed away)