-- What Is An Annuity --
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What is an 'Annuity'?
Annuities are simply a means by which you can convert your existing pension fund to an income that will be paid for the rest of your life. Unlike a 'Pension Drawdown' which is classed as an Unsecured Pension (USP), 'Pension Annuities' are classed as 'Secured Pensions' because the income amount can be guaranteed for life.
A Pension Annuity can be purchased using the whole of your pension fund or, if you prefer, it can be purchased using the remaining fund after you have taken your tax-free cash entitlement (usually around 25%).
The amount that you are entitled to receive from the Annuity will depend on the 'Pension Annuity' rate that is available at the time of purchase.
Unlike an 'Income Drawdown' plan which allows variations in the income payments, with a 'Pension Annuity' the terms are fixed from the start of the plan.
Find out more:
What is a 'Conventional Annuity'?
What are 'Enhanced Annuities' and 'Impaired Annuities'?
What is the 'Open Market Option'?
What are 'Profit & Investment (Unit) Linked Annuities'?
What are 'Variable Annuities'?
For a brief and informative overview please visit ' A Guide to Annuities '.
