Advantages and Disadvantages of Annuities

Advantages

N

It pays you an income which cannot go down in value (only conventional/enhanced/impaired annuities)

N

Income is paid until you die – not for a limited period

N

Income will never run out in your lifetime.

N

There’s no investment risk for conventional annuities

N

It can provide an income after your death to other family members

N

You can protect your income against inflation

N

Easy to understand the choices

N

Option to protect capital through Pension Annuity Protection

Disadvantages

M

Once an annuity is set up you cannot change it

M

If it is set up on your life only, on your death it will stop

M

You must decide what income type you require at the outset

M

You must decide what additional benefits you are going to include at outset

M

You lose ownership of your funds

M

Potential loss of benefit and capital on death

M

No further benefit from investment growth

M

Annuity rates fluctuate therefore if you buy when the rate is low your income is fixed at this rate

Shares
Share This